George Osborne's Fiscal Charter

The Tories Fiscal Charter is an appallingly brazen piece of economic posturing for purely political purposes and an affront to good economic reasoning. It defies belief that more people are not questioning the validity of such an arbitrary and economically incoherent bit of lawmaking carried out as some kind of attention seeking political stunt rather than for any coherent reason.

It's clear that the Tory party simply couldn't behave in this manner without a huge deal of complacency about how badly misinformed the general public are about the economy in general, and more importantly, the Tories' own appalling economic record of imposing socially and economically destructive ideology, despite the fact that most economists see austerity as dangerous economic nonsense.

George Osborne is a man who has overseen the slowest post-crisis recovery in history, the longest sustained decline in average wages in history, a shocking decline in comparative productivity with the other G7 economies, and the continued existence of the vast UK trade deficit. Yet there he was blustering away as if he's some kind of amazing guardian of the economy, rather than a hopelessly under-qualified chancer who has somehow been given a mandate by just 24% of the public to continue his hopelessly inept and often venal economic stewardship for another five years.

Instead of being derided for introducing one ludicrous piece of pure political posturing dressed up as some kind of grown up/prudent economic policy after another, Osborne and the Tories have been getting away with it virtually unscathed due to the complicity of the mainstream media and the failure over the previous five years of the Labour Party to properly speak out against the bizarre Tory/mainstream media consensus that ideologically driven austerity is not an incoherent and damaging policy, and to not subject them to constant scrutiny and criticism for continuing to stick with it despite so much evidence that it's bad for the UK economy.

If you think that the idea of legislating perpetual arbitrary budget surpluses is a good idea, you need to have an actual think about what that means. It means that the government will always have to collect more in taxes than it actually spends, even if it can be shown that spending the same as it raises in taxes (or borrowing some extra to invest) would be highly beneficial to the UK economy.

The Fiscal Charter is ridiculous arbitrary rubbish of the kind that riddles modern economies. Why should a government be bound in perpetuity into spending 3% less than it raises in taxes each year? Why 3% and not 2% or 4%? What is so mystical about this spending ratio of 97% of what is raised in taxation that it needs to be enshrined in government legislation like some kind of arbitrary unquestionable economic scripture?

It's ridiculous that so many people openly support the idea that in "ordinary economic times"* the state should be bound into always taking more from its citizens than it actually spends on services and investment, even if it can be shown that extra spending on particular services or strategic investment in specific sectors would dramatically improve the UK economy! How can anyone believe that such a rule constitutes rational, common-sense good stewardship of the economy?

It was an embarrassment to the UK that such a ridiculous piece of legislation was voted through parliament, but I was impressed by the Labour backbencher Jonathan Reynolds when he properly properly skewered Osborne's ludicrous posturing during the debate (see image). At least someone in Westminster has the wit to say what an obviously crap idea it is.

I do think it's a crying shame that there must be a certain number of economically literate Tory politicians who could see the truth in accusations that the Fiscal Charter is a load of ridiculously arbitrary political posturing, but who still voted in favour of it because they behave like drones, with no freedom to rebel against such patent idiocy.

It's also a shame that a number of Labour MPs abstained on the vote because they're apparently incapable of understanding how ridiculous the idea of legislating permanent arbitrary surpluses is, especially coming from a man who promised back in 2010 that his ideological austerity agenda would have us in surplus already by now and then failed so spectacularly to achieve it.

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* = What on earth are "ordinary economic times" anyway? No situation where the government has bound itself into not spending what they raise in taxes even when it could clearly be shown that such spending would be good for the economy cound ever be considered a "normal economic time". It would have to be considered an extraordinary economic period where economic illiteracy could be passed off to the public as "common sense" or "good economic housekeeping".

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