A government can never ‘over’spend…

Spending is literally what governments are for.

Governments may not tax back sufficient of their expenditure to prevent inflation, but the level of inflation is a democratic choice. It cannot be ‘over’spending for exactly that reason.

I thought the explanation (below -just over two minutes) of how the BBC has, helped, over the last decade, to reframe the logic of this argument, a compelling narrative.

How sad I feel to have been initially so very naive as to have swallowed it …

Comments

  1. Andrew Dickie -

    I think it is Ramesh Patel who has been banging this drum since before the 2015 General Election – certainly I recall a former Conservative with an Indian-subcontinental name challenging Cameron at that time.

    It only reinforces the correctness of John Prescott’s epitaph on Labour’s 2015
    campaign, and the folly of the course taken by the Two Eds, who should have spent the first 18 months of their time at the top refuting the Conservative nonsense about maxing out on the credit cards, running the highest debt ever, and nearly bankrupting the UK – all of which was either economically illiterate nonsense, mendacious untruths with the aim to bamboozle the electorate or both.

    http://www.mirror.co.uk/news/uk-news/labour-lost-election-5-years-5671406#ICID=sharebar_twitter

  2. Bill Hughes -

    Yes, they always used to call it the PSBR = public sector borrowing requirement. For decades previous Tory governments ran this as perfectly normal. There were a few years when there was no “deficit” under Gordon Brown’s chancellorship, though obviously the Tories would never mention this. It is now glaringly obvious that 9 years plus of Tory austerity has caused so much damage for absolutely no reason other than propaganda purposes. Lets hope their folly really bites them in the 12 December election.

    1. Peter May -

      I’d forgotten about the PSBR – though we now know there is no ‘requirement’ as such, unless we consider that pensions should be organised on that basis.
      In which case of course it becomes the Pension Sector Borrowing Requirement…

  3. Andrew Dickie -

    As a follow-up, I wish Gordon Brown had stayed Leader till Ed Miliband was elected to replace him. Brown would never have let that nonsense pass muster.

    I recall his warning to Cameron in one of the televised debates – that last, I think – that even the Tories’ planned emergency £6bn cut risked tipping the UK economy into recession.

    And so it proved. Alas, Tory austerity economics, as I have posted elsewhere before, is really a modern version of the mediaeval medical practice of bloodletting – both in terms of its rationale (reducing pressure in the system), efficacy (nil, IMO), and outcome (if done to excess – as in the period 2010 to date – the patient sickens, and eventually dies).

    So, REAL “voodoo economics”.

    1. Andrew (Andy) Crow -

      “As a follow-up, I wish Gordon Brown had stayed Leader till Ed Miliband was elected to replace him. Brown would never have let that nonsense pass muster.”

      He’s had ten years to undermine the Tory BS and said virtually nothing. He had the keys to No 10 and didn’t seem to know why he had wanted them.

      And he may not have let one particular brand of nonsense pass muster, (although he did) but he allowed plenty more while he was in No 11 and we’re still paying through the nose for his PFI schemes which pretended to be ‘prudence’, but were no more than bookkeeping exercises, to hide government spending by outsourcing a gift to the finance sector.

      Red Gordon the New Labour bogeyman was barely even pink.

      1. Peter May -

        Agree entirely re the PFI nonsense but I do think Brown would have had the weight to undermine the Tory BS if he hadn’t gone immediately back to the backbenches and in effect felt he didn’t have the authority to intervene any longer – so your 10 year jibe is not quite fair. I think (tho’ it seems entirely remarkable for almost any politician now) that Brown was trying to be ‘fair’ to his successor.

      2. Andrew Dickie -

        Andy, Peter makes exactly my point in Brown’s favour. And any failings in Brown’s tenure of the Chancellorship (and PFI is certainly one – ruinously expensive and inefficient, both financially, and in many cases operationally) does not detract from the errors of the Two Eds, and the fact that someone tipped to head the IMF would have had the gravitas to outface schoolboy “Gideon” Osborne.

        No wonder Osborne vetoed that appointment.

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