Britain’s Self-Inflicted Misery

[ttosca]

For a year now, Britain?s economy has been stuck in a vicious cycle of low growth, high unemployment and fiscal austerity. But unlike Greece, which has been forced into induced recession by misguided European Union creditors, Britain has inflicted this harmful quack cure on itself.

Austerity was a deliberate ideological choice by Prime Minister David Cameron?s ruling coalition of Conservatives and Liberal Democrats, elected 17 months ago. It has failed and can be expected to keep failing. But neither party is yet prepared to acknowledge that reality and change course.

Britain?s economy has barely grown since the budget cuts began taking effect late last year. The most recent quarterly figures showed the economy flat-lining, with growth at 0.1 percent.

New figures released this week reported Britain?s highest jobless numbers in more than 15 years. Independent analysts expect unemployment ? now 8.1 percent ? to keep rising in the months ahead. The government has kept its promise to slash public-sector jobs ? more than 100,000 have been lost in recent months. But its deficit-reduction policies have failed to revive the business confidence that was supposed to spur private-sector hiring.

Drastic public spending cuts were the wrong deficit-reduction strategy for the weakened British economy a year ago. And they are the wrong strategy for the faltering American economy today. Britain?s unhappy experience is further evidence that radical reductions in federal spending will do little but stifle economic recovery.

A few years of robust growth would go far toward making swollen federal deficits more manageable. But slashing government spending in an already stalled economy weakens anemic demand, leading to lost output and lost tax revenues. As revenues fall, deficit reduction requires longer, deeper spending cuts. Cut too far, too fast, and the result is not a balanced budget but a lost decade of no growth. That could now happen in Britain. And if the Republicans have their way, it could also happen here.

Austerity is a political ideology masquerading as an economic policy. It rests on a myth, impervious to facts, that portrays all government spending as wasteful and harmful, and unnecessary to the recovery. The real world is a lot more complicated. America has no need to repeat Mr. Cameron?s failed experiment.

www.nytimes.com/2011/10/15/opinion/britains-self-inflicted-misery.html?_r=4&ref=opinion

[CogitoErgoSometimes]

So what do you think? What would you do? Copy/pasting articles from the NY Times is easy.

[Disputandum]

Link took me to a log in page, can you re-post as would be interested in reading this in full?

[CogitoErgoSometimes]

It's probably a subscription wall.

The American Right is terrified, not of cuts in public spending, but that they'll be asked to pay more tax to finance a social and welfare system that isn't anywhere approaching close to the one enjoyed in the UK. Many think tax dollars shouldn't be used for anything other than the military. Sink or swim stuff. Obama would leap for joy if the Republicans would concede to spending even half as liberal as our own Coalition.

[scarevola]

Ok, but what's the alternative programme? How much will it cost? And why would it work better?

[ttosca]

Disputandum

Link took me to a log in page, can you re-post as would be interested in reading this in full?

That is the piece in full. It's a short opinion piece.

[ttosca]

BarryKent-

I've already put my opinion in words, many, many times over on MN. Perhaps you're new here. I am not one for withholding my own opinion.

[ttosca]

Ok, but what's the alternative programme? How much will it cost? And why would it work better?

The alternative is a focus a growth and job creation, not cuts which stifle demand. Furthermore, demand should be stimulated by helping to put money in to those at the bottom, not the top.

Corporations already effectively pay few taxes because of offshoring and dodgy deals with the government. This has shifted the tax burden to citizens, who are effectively now broke, after having their wages stagnating for three decades and who had to take on debt in order to maintain their standard of living.

So it would be wise to immediately help stimulate demand by nullifying income tax at and below the minimum wage. Other things you can do is cut vat to 20% to stimulate spending. Implement a Robin-hood tax on financial transactions, which would bring in tens of billions in tax revenue and use the money for infrastructure projects to create jobs. Finally, instead of reducing the staff and budget of Revenue and Customs, the govt. should be aiding tax collection in any way they can, and go after personal and corporate tax avoidance and tax evasion. This could bring in a further several tens of billions of pounds.

These are just a few of the suggestions being offered by the protesters in the UK, who are taking part in global protests in 951 cities across the world across 82 countries.

We are the 99%

[moondog]

Oh I do love Tosca's phlegm flecked filthy Tory scum diatribes.
Great fun!
C'mon. Wotcha got for us tonight?

[moondog]

[niceguy2]

Well Ttosca usually starts with a cut & paste from some article which has been written and supports his own viewpoint.

Next he will hurl weak insults at anyone who tries to engage in debate. If he's short on facts then he just ups the rhetoric or pastes another (usually extremely long) article which most will not bother reading.

[helpmabob]

I think ttosca makes a good point here

[ElBurroSinNombre]

Barry, I have made this point to ttosca before but he / she does not get it. Its not as if something that is published in a newspaper represents the truth in any sense. Any intelligent person knows that all newspapers have an agenda and appeal to the prejudices of their constituency. As if posting an article that you agree with makes your opinion more valid. Why not just articulate what you think and tell us that instead?

[claig]

'Why not just articulate what you think and tell us that instead?'

That presupposes thinking for oneself as opposed to letting others think for you.


'Any intelligent person knows that all newspapers have an agenda and appeal to the prejudices of their constituency.'

While I agree that this is the rule; every rule has an exception, and in this case the exception would seem to be the Daily Mail.

[ElBurroSinNombre]

What makes me laugh is that the hack who wrote that probably does not even agree with it, but is churning it out as that is what they have to do to keep their job. And the likes of ttosca think they are reading the thoughts of a kindred spirit!

[claig]

The same might be said about the Labour manifesto.

Looking it up, it seems to be an editorial piece.

[ChickenLickn]

tosca Interesting post

I agree with this (and so do the majority of economists!)

We are ruled by idiot.

[claig]

"If all economists were laid end to end, they would not reach a conclusion."

• George Bernard Shaw

[claig]

'I believe that economists put decimal points in their forecasts to show they have a sense of humor.'

• William Gilmore Simms

[scarevola]

Cut VAT to 20% ????? That is already it's current maximum.

Interesting headlines, but could you add the figures on how much it will cost to reverse the current cuts programme (ie what is the increase to public spending) and how much is the estimated revenue from the proposed new measures (net of new costs, like the Revenue expansion plans) Without even basic costings, this isn't an adequate proposal.

[Solopower]

Ttosca, I enjoy your cut and pastes. You and other posters who do the same have introduced me to loads of interesting articles that I would never have read otherwise.

About the economic situation, we do know two things:

The problem is global, and the solution needs to be too. The power of global companies needs to be reduced if we don't want them to rule the world.

And nothing that has been tried by this government has succeeded so far. So why not try Ttosca's alternative solution? Time for a change.

[Tortington]

i too like your comments and observations ttosca. i used to post articles too, but got mucht he same personal comments and just got worn down. I wanted to introduce to a wider audience things that were happening that they might have missed. i certainly wouldnlt have read the piece you hace posted for instance.

so thanks