BECAUSE OF A SHORTFALL
in tax receipts, government borrowing will have to increase by a further £75
billion in the coming year according to a report in today's Independent. Our national debt at Q1
2013 stood at £1,377 billion (1.3 trillion ),
or 88% of our GDP. Servicing it has meant finding £43 billion; roughly the size
of our defence budget from taxation. Now George Osborne, purely for political
reasons due to a forthcoming general election, is seeking to borrow more to
dangle before the public in extra spending in order for his party to remain in
power.
This is not a cynical game played by one party, but one
played by both the main parties months before any general election when in
government. Our politicians are prepared to borrow or even beg on their knees
to the markets (at whatever levels of interest) in order to retain their hold
on power.
Because of the 'austerity' that Osborn has demanded from
the government's spending departments, the market will oblige Osborn in his
borrowing. But his austerity package has had little or no impact on the deficit
so far.
The UK public has had a mere taster of what austerity
really means. Both our main parties are promising further competitive spending
in the run-up to next May's general election; after which the taxpayer will be
the ultimate source of financing for probably the next six generations, in order
to conciliate the deficit.
The financial markets will make their judgement and demand
a level of interest on all further government borrowing that rises in
accordance with the tax intake of the nation they are lending to. In other
words, if our government wishes to continue to borrow (for instance) through issuing bonds, the market must be
confident that any promised interest on
them will be forthcoming at the time the government proposes; and if at
any time the market judges that the government cannot honour such an
arrangement, the market will not buy government bonds.
OUR NATIONAL DEBT is a
drag anchor on future generations, and will continue to be so for as long as
politicians continue to put themselves and their party interests before that of
the nation. The so-called 'austerity programme' has been no such thing; it has
hardly scraped the surface of what is needed to be done to reduce the national
debt to anything like sustainability, let alone its elimination - which will
never happen, nor should it. Nations, like families, have to borrow.
But as with an addiction to gambling; our politicians
have taxed, borrowed, and spent to feed their addiction to power; and the exemplar
for such behaviour has always been the Labour Party when in power. But with
Labour it was not only about retaining power, but also about ideology – a truly
naive faith in the state as provider - a
major component of socialism which Ed Milliband is intent upon resurrecting.
Gordon Brown added over 300,000 jobs to the public sector;
some 90% of whom he calculated would vote Labour. The kind of percentage he believed prevalent within the
public sector as a whole. Tony Blair on
the other hand saw tax and spend as (like the Tories) a leverage for continuing
in power. But even he thought that allowing Portuguese and Polish migrants into
the country in 2004 would bring an electoral benefit to Labour now he had
dispatched the white working class into irrelevance.
Through the shenanigans of
politicians we have a bloated public sector which accounts for nearly 40% of
our GDP. In other words it is the private sector that has to bear this burden
through the taxes they and their employees pay - and this state of affairs
cannot continue.
The state sector has to bear the
brunt for the state's clinical obesity. And when they came to power in 2010 the
Tories promised economic austerity: austerity, in any true meaning of the word,
has never taken place. The meaning was prostituted by the incoming 2010
government for effect after the 2008 financial crash. Let me run a few synonyms by you and let you judge for
yourselves whether what this government has done measures up to any meaning of
austerity: gravity, rigor, severity, stringency, and harshness. Do any of these
measure up to what you have experienced as recipients of government austerity?
I doubt it.
Before you answer; let me remind you
of what austerity once meant in equally troubled times in the 1930s. Then
austerity meant, in the UK, people like my father having to work, not for wages
but food tokens. He had to bike several miles a day to dig holes for telegraph
poles to be planted like trees; he had to provide his own shovel; and he was
given a food ticket as payment.
When the work was completed, he was
told he had to sell his bike before he qualified for national assistance – you
can understand why means testing has been out of favour for so long among the
left in all the main parties. But without it human nature abuses the process,
as we see today when means testing is frowned upon by all the main parties.
FOR
OUR NATIONAL DEBT to reach manageable levels it will require more than what this
coalition are prepared to do. They are not prepared to cause any kind of real
hardship within the country because of their need to cling to power.
It will be the same with the Labour
Party, if they win next May. The Labour Party is ideologically addicted to
public spending and will promise the earth. They will deliver of course because
it is not their own money they are spending; and they can demand ever more in
taxation from the rich leaving the economic structure of the nation's economy
even more fallible to complete destruction - more so than it was after their
last trespass into the nation's economy under
Gordon Brown.
There is a myopia abroad among the
main British political parties that can only concentrate their minds on power. Party
political power has become the raison d'être for the governing political
parties. They can no longer do what is required to heal their country's economy;
they function only for a second (or third) term; and will coalesce their
efforts to this one and only purpose… is it little wonder that Ukip has so
successfully called their bluff?
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