Labour are wrong about the Tories, but both are wrong about the Economy

Too far too fast has become a tide phrase of a party on the wrong side of the argument. Amusingly Labour seem to know they have lost the argument as well as any vestiges of economic credibility that Gordon Brown didn’t sell for cheap along with out Gold Reserves. They are opposing the coalitions cuts but then claiming that they will not reverse them if they are ever elected, very much having your cake and eating it.

Labour are wrong that the Tories are cutting too hard, too fast, too much and at the wrong time, not just because that the so called austerity we are facing is the only way to save our countries credit ratings, but because the Tories are not cutting at all.

Under Labour the national debt went up £319bn from 1996-97 to 2009-10. Under Coalition it will go up £465bn from 2009-10 to 2014-15. Not just in nominal terms, these are real terms.

 

 

Spending is going up almost every single year under the Tories, the fiscal stimulus that lefties claim we need to fix the economy are happening, and it isn’t working. The Tories had the right idea that we needed to cut to save the economy but they aren’t doing it. They may not be going as (to use a technical term) bat sh*t insane as Labours plans were, but they, through their high spending Keynesian policies wrapped up as deficit reduction, discrediting Austerity before it has ever been tried.

The solution, try actual spending cuts. When a household cuts its spending the amount it is spent goes down, letting Government get away with the doublespeak that is cuts meaning spending going up but at a slower rate is half the problem.

Keynesian economics has failed, of that there can be no doubt. Free markets, small Government, these are ideas that have not been tried, are not even being thought about, and are the only ones that can get us out of the Economic mess we are in.

 

2 COMMENTS

  1. ‘Actual spending cuts’ as you put it would make the situation even worse. To employ such austerity, you must have private sector growth to absorb the mass of jobs cuts in the public sector that you are proposing. These must not simply be any old jobs either, but ones relevant to the skills of the employees being sacked en masse. To do this you would need tax cuts to stimulate growth in the private sector (which would be hampered by less public sector investment and procurement). Thus the tax cuts must be huge and this costs money, eating into your ‘savings’ through austerity. The only way out of this mess is to therefore cut slowly by maintaining public sector investment, or by cutting massively and spending on tax cuts.

    • As I argued in a previous post, tax cuts are mostly sefl financing or raise revenues, more evidence for that comes in my next post, so yes I would advocate serious spending cuts and tax cuts

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