Cuts? What Cuts?

My latest article in "The Grapevine" went up the other day, and therefore I am linking it to the blog.  This week's article focuses on the myth that Britain is entering an era of "savage" cuts and an "era of austerity".  Actually, spending is set to go up for the next few years, so the damage of these cuts is massively exaggerated.

However, what the reaction to these "cuts" also shows is that there is a deliberate political trick on the part of left wing special interests to make these cuts hurt more than they usually would, as well as showing the need that the public sector has to continually eat into an economy in order for it to remain workable.  If we are going to get our economy back in order, there needs to be a stop to these games and tricks - it is time to admit that public sector spending at such a large rate simply does not work!

"Apparently we are now in the era of austerity, the era of savage cuts! We are about to see the libraries closing, entire bands of nurses being thrown onto the unemployment line, schools being shut down and of course that old left-wing media catchphrase – “the poorest and most vulnerable being hit hardest.” Or are we?

The so-called cuts are being spun by the left as much as possible in order to create mass displeasure at “savage Tory cuts.” The lesson that the public is supposed to draw is that the cuts are harsh, cruel and are going to lead to a new Dickensian nightmare. Throw in a few snarky remarks about Eton and you have almost every Guardian editorial on economics for the last 9 months.

The problem with all this is that it isn’t really true. Despite the rhetoric there are no net spending cuts. Public spending is actually going to increase over the next few years, but will not increase as much as it otherwise would. Only then will it begin to shrink in real terms, and will eventually return to 2008-9 levels by 2016. Considering 2008-9 was not exactly a fiscally responsible period, it is tough to see what the fuss is all about.

So, why all the wailing and gnashing of teeth then? For it cannot be in doubt that there are serious predictions that services will take a hit, that there will be job losses, and that budgets will be cut due to the fact that the public sector counts on continued expansion. There are two explanations for this, neither of which makes the left look particularly good.

The first explanation is that there is a mix of opportunism and exaggeration involved here. Left-wing politicians, union officials and special interests see that there is a re-interpretation of the role of the state at play here, and they want it stopped. Therefore it is in their interests to make these “cuts” as painful as possible, and to exaggerate how difficult they will be...."

The rest of the article can be found here.