Thursday, October 6, 2011

The folly of talking about cuts

Why do politicians, journalists, lobbyists, activists and just about everyone talk about every kind of public spending alteration in the terms of "cuts" and "increases"? Totally in relativistic terms? I'm not even going to go into the debate about why these groups are relentlessly focussed on these inputs over what really matters, the outcomes. Why can't anyone in Britain have a genuine, analytical debate over what the appropriate level of spending, or taxation, is in any given dimension of the state?
Why does nearly every discussion start under the assumption that in pretty much every department the present state of affairs is the optimal status quo? Why are right-wingers advocating "lower taxes" rather than "low taxes", or at the very least talking about the level at which they think taxes should be appropriately set? Why are the numerous union activists chanting against "Tory cuts" spelling out in detail what they think the right level of public spending should be? (For that matter, we might as well ask, why did Labour cancel its last Comprehensive Spending Review? In doing so they completely absolved themselves of any fiscal credibility, passing the buck to their successors in every possible way.)
In fact why are the high-profile supposed Conservatives not making the case for right-wing policies, or further fiscal consolidation than is absolutely necessary? Do they seriously think that anyone who still supports them at this point would actually mind them going further with public sector spending cuts? Especially given there's a remarkably strong case that further such cuts are indeed necessary?
And on the speed of cuts as well. It has been reported to a moderate extent that had the Tories been in power alone, a hypothetical Tory majority government would have cut the entire deficit within the first year or so, and were held back by the Lib Dems. (I am mildly dubious about this because the Chancellor would still have been George Osborne, who was advocating Gordon Brown's spending plans until he decided it would be politically expedient to oppose them, rather too late.) That would presumably mean that by this point, today, in October 2011, we would be living in a United Kingdom with no national deficit at all. And government could plod along as usual without there being mandatory fiscal consolidation every single year. (By election time, most people would have forgotten there were any spending cuts at all!)
But, naturally, the mountain of debt would still remain - something that concerned me before the election, that Osborne's promise of eliminating the deficit was oversold, we need to be in substantial surplus for a long enough time before we can start making a serious dent into that mountain. And back here in reality, the real Osborne is borrowing more than ever before, with the debt mountain actually set to RISE by another £315 billion over the course of this parliament, to nearly £1.2 trillion. Which surely, we can all agree, is not an appropriate amount of debt for any country to be into...

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