Tuesday, April 28, 2015

Austerity is a con


The Tory austerity narrative is a simple and oft repeated one. It doesn't matter that "we've got to cut our way to growth" is nonsensical from a macroeconomic perspective, it's been repeated so often now that millions of people accept it as fact.

Some people (myself included) have maintained all along that it was always a simple con designed to give the Tories an excuse to continue their agenda of transferring ever more wealth to the tiny super-rich minority under the guise of bringing the national debt under control.

There is bountiful evidence that the austerity narrative is a misleading one, especially the myriad of counter-factual Tory slogans used to support it. They claimed that "we're all in this together" while handing the UK's income millionaires an average £100,000 per year tax cut and trying to defend 200%+ bankers's bonuses from new EU rules. They claimed they were "making work pay" whilst overseeing the longest sustained decline in average earnings since records began, and slashing in-work social security; and they claimed over and again that "Labour bankrupted Britain" when it was George Osborne that lost the UK's AAA credit ratings for the first time since the 1970s.

Now that their government is over we can look at what ideological austerity has actually achieved.

The first thing to note is that George Osborne's austerity agenda has spectacularly failed to achieve what he claimed it was going to do when he came to power back in 2010. He claimed that ideological austerity would have completely eliminated the public sector deficit by 2015, but it hasn't even been halved. This failure means that the debt is still growing dramatically, the UK has suffered its slowest economic recovery ever, and George Osborne has created more new debt in just 5 years than every single Labour government in history combined!

The last set of economic figures released before the 2015 General Election show that despite Osborne's efforts to dope the economy in 2014 and 2015 to create an election winning "feel good factor", GDP growth fell to a paltry 0.3% in the first quarter of 2015.

Given that George Osborne missed all of his 2010 economic predictions and oversaw the slowest economic recovery on record, it's absolutely clear that any signs of economic recovery that have happened since 2010 have happened despite ideological austerity, not because of it.

Anyone who claimed that ideological austerity was never actually about reducing the national debt or stimulating economic recovery can feel completely vindicated by George Osborne's failures, however there was a secondary part claiming that the actual purpose was to oversee a vast transfer of wealth from the majority of ordinary people to the tiny super-rich minority.

That ordinary people are poorer is borne out by the fact that British workers have endured the longest sustained decline in average earnings since records began and by the fact that more working families than ever before are reliant upon housing benefits as a result of poverty wages.

The evidence is just as clear that the super-wealthy minority has done incredibly well while the rest of us have been suffering the effects of Tory ideological austerity. In April 2015 The Sunday Times revealed that the 1,000 wealthiest people in Britain have doubled their wealth since Labour's last year in office.

The conclusion is inescapable. If we judge ideological austerity by what the Tories claim the objective was (getting the national debt under control), then it's been a spectacular failure, but if we judge ideological austerity by what others claimed the objective was (transferring as much wealth as possible from the majority to the super-rich minority) then it's been a resounding success.

The sad thing is that despite the abundance of evidence that austerity is a con, there are millions of people out there who are so wedded to the austerity narrative, that they're going to go out and vote Tory because they are genuinely concerned about the state of our public finances but unable to grasp the simple fact that Tory ideological austerity is a con that has spectacularly failed to resolve our public sector finance problems because that's not what it was ever actually meant to do.  



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