We
constantly hear the debate between those who see the need for austerity
(generally on the right) and those who advocate growth (usually on the
left notable the Labour party). Yet this debate is a diversion for the
simple reason that we are going to get austerity whatever people want.
There is no money from the bond markets as they have had enough of
government debt. The fact is, you can't borrow your way out of a debt
crisis!
So
far, the UK has borrowed £500bn to spend on growth policies. These
Keynesian policies designed to get the economy moving have failed (so
far) and will continue to do so. If the government is going to spend so
much, it must direct money towards industries and technologies that the
rest of the world will need. However, the the most effective way to get
growth going is to cut public expenditure enough to allow tax cuts,
there by giving resources to individuals and companies as they are much
more efficient and creative at spending than governments.
Western
governments and the big banks are in a crisis and cannot find easy
answers to our current economic problems. At least ones that will get
them re-elected! Witness Greece? It would be better if politicians (like
Ed Balls) would tell how it is and stop peddling dangerous untruths to a
gullible and frightened electorate.
No comments:
Post a Comment