12 things you should know about the Lib-Dem policy of Ultra-Austerity Forever

It's a busy election campaign so I shouldn't really be wasting my Sunday analysing the activities of a silly nonsense party like the Lib-Dems, but their latest policy announcement of 'Ultra-Austerity Forever' is so bizarre, so wrong headed, so economically illiterate, so off the charts crazy, it's a matter of morbid curiosity.

Like a horrific pile up on the other side of the motorway, it's giving me the compulsion to slow down and have a look.

I know it's sick and wrong to gawk like this, when I've got much more important election priorities to focus on like hammering the Tories for their malice and incompetence, or talking about the ambitious democratic socialist policies Labour are putting forward, or taking a more detailed look at the political landscape in Scotland, Wales, or Northern Ireland ... but I just can't help it.

So here are 12 things you should know about Lib-Dem Ultra-Austerity Forever.

Ultra-Austerity forever

There are two main strands to the Lib-Dem policy of Ultra-Austerity Forever.

The first is the enforcement of a "fiscal rule" that the government must create a permanent budget surplus of 1%, meaning that the government permanently extracts more wealth out of the economy than it invests back into it.

The second element is that the government deny funding to any project that cannot prove itself economically profitable, no matter the other benefits (social, environmental, public health, immeasurable effects on future economic prosperity ...).

No apologies

The Lib-Dems have never apologised for the ruinous consequences of the austerity fanaticism enforced by the 2010-15 Tory/Lib-Dem coalition (collapsing living standards, soaring poverty, the worst sustained decline in the value of workers' wages since records began, the slowest economic recovery in centuries, vandalism of the social safety net, deliberate under-funding of public services, the worst house building figures since the 1920s, the loss of the UK's AAA credit ratings, the lowest levels of infrastructure investment in the developed world ...).

Neither have they apologised for the fact that austerity extremism caused the living standards collapse that drove the Leave vote marginally over the winning line in 2016.

All of this devastation and chaos was caused by George Osborne's incompetent efforts to cut state spending back to a balanced budget (a 0% deficit).

The Lib-Dems aren't just unapologetic about their role in this devastation, they're actually promising to intensify austerity by aiming for a budget surplus of 1% (a deficit of -1%)!

They're not just refusing to apologise for austerity extremism, they're doubling down on it and pushing it harder than ever!

Investment vs Austerity

Investment economics says that you create prosperity by investing in stuff like infrastructure, housing, skills and education, high skill jobs, quality services.

Austerity economics says that you create prosperity by wantonly slashing away at all aspects of state spending in the vain hope that your economy will finally be the one that breaks precedent by demonstrating that it is possible to mindlessly cut your way to growth and prosperity.

There's absolutely no way that any Lib-Dem can pretend that their party leaders are intending to use tried and tested investment economics to achieve this 1% surplus because their political language is utterly infested with the kind of economic baby talk we've come to expect from austerity fetishists.

During the Lib-Dems' Ultra-Austerity Forever launch speech Ed Davey said "The spending competition between the Labour and Conservative fantasists has made Santa Claus seem like Scrooge".

He's literally ridiculing the idea of investing in public services and infrastructure projects! You'd have to be utterly clueless to not understand that this kind of anti-investment rhetoric is motivated by undying belief in crackpot 'let's cut our way to prosperity' austerity dogma.

Arbitrary economic illiteracy

Politicians love to put inflexible targets on things because they think "fiscal rules" make them sound important and knowledgeable, but in reality economists tear their hair out at nonsense like an inflexible 1% budget surplus, no matter what the circumstances.

You don't even need to have any economics training whatever to understand the idiocy of arbitrary targets like this. Just ask yourself why exactly 1% is the economically ideal number. Why not a 0.9% surplus? Why not a 1.25% surplus?

There's clearly been no actual calculation done. They've just settled on 1% because it sounds catchy and memorable, haven't they?

Also, what happens if something changes dramatically? What if these's a natural disaster? or a nuclear power station melts down? Or somebody explodes a dirty bomb in a British city?

Or what if it's something utterly mundane like the cost of government borrowing going up or down dramatically?

Under what circumstances does it become acceptable to break this completely arbitrary 1% fiscal rule?

Shrinking the state

An arbitrary fiscal rule enforcing the government to only ever spend 99% of what it extracts from the economy is quite obviously a recipe for shrinking the state relative to the size of the economy.

The desire to shrink the state has always been a mainstay of hard-right politics, and the Lib-Dems have actually thought of a way to legislatively encode this state shrinking ideology!

Bully for them. They're more dedicated to the hard-right state shrinking ideology than the Tories!

The price of everything, the value of nothing

The Lib-Dem strategy of using beancounters to analyse every single bit of government spending to ensure it is capable of turning a profit might sound fairly sensible in practice, but in reality it's an exercise in knowing the price of everything and the value of nothing.

Just think about investments like a NHS diabetes awareness campaigns, or providing children's music lessons in schools, both of which cost money in the present, but have extremely nebulous and hard-to-measure potential future economic benefits in the long-term.

How is it even possible to estimate the long term economic benefit of these things in terms of reduced demand on NHS services and fewer lost sick days from work, or the potential future contribution to the £100 billion UK creative industries market?

And what might the cost of scrapping their funding turn out to be in 25 years time? How would you even begin to calculate the long-term economic repercussions?

Then there's the simple fact that money isn't everything.

OK, maybe a public investment only returns 90p in the pound, but what about other factors like the social benefit? Environmental benefits? Public health benefits? Quality of life benefits?

Why scrap all of that into the bin just to fixate on whether the investment pays back more than it cost in monetary terms?

How about paying for granny's operation after she's had a fall?

It turns out that elderly people with broken hips become exponentially more likely to die the longer they wait for treatment , which means the state would save huge amounts of money on the cost of the operation, the cost of future medical care and social care, the cost of future pension payments etc.

Spending money on reducing hip replacement waiting times for elderly people is clearly counter-productive if you view things from a purely fiscal perspective.

If it's more profitable to just let granny slowly die in agony rather than replace her broken hip, isn't that the fiscally responsible thing to do?

Incompatibility with their own damned policies

The idea of scrutinising every single element of government spending from a purely financial perspective isn't just narrow-minded, it's also incompatible with a number of the Lib-Dems own policies!

Take their pledge to plant 60 million trees.

From an environmental perspective tree planting is actually a fairly good idea (although not as good as setting aside land to naturally re-wild itself), but in terms of an economic investment alone, it's unjustifiable.

How on earth is planting millions of trees over thousands of acres of viable farmland ever going to spin an economic profit for the government?

The Lib-Dems are so inept that their headline election pledges are completely at odds with their proposed fiscal rules!

Outflanking the Tories

It's quite extraordinary to see the party of Charles Kennedy attempting to outflank the Tory party on the economic hard-right, with their state-shrinking, Ultra-Austerity Forever agenda.

This is a party that competed with Labour for socially progressive centre-left votes until just a decade ago, yet now they're presenting themselves as the most radical economically right-wing political party in British politics!

The last of the Cameroons

The last politician to dare raise the spectre of austerity to infinity was David Cameron, who gave a truly extraordinary speech promising permanent austerity for the masses, whilst surrounded by gold ornaments and all of the trappings of wealth and privilege at the Lord Mayor's banquet in 2013.

Promising 'austerity forever' was a bold move, even at the height of austerity mania in 2013, but promising it now, in the middle of an election campaign, when austerity has gone completely out of fashion so much that even the Tory party is trying to distance itself from it ... well it's absolutely wild, isn't it?

The Lib-Dems are clearly pining for their glory days of coalition government, six figure salaries, ministerial cars, important cabinet meetings ... And in their pathetic attempts to bring those past glory days they've resorted to the magical thinking of channelling David Cameron's political ghost!

Reconsidering the austerity coalition

Jeremy Corbyn has won the Investment vs Austerity argument so comprehensively that even the Tories are trying to distance themselves from austerity extremism, so it's incredible that the Lib-Dems have decided to double down on it as the last austerity party standing.

Given the Lib-Dems are the last remaining advocates of hard-right austerity fanaticism in British politics, surely it's time to reconsider their claims to have moderated the Tories during the austerity coalition years?

Why are we taking their claims at face value, when it now seems much more likely that they were just as keen on austerity as the Tories at the time, if not actively egging them on?

Tory target seats

Attempting to outflank the Tories to the economic hard-right looks like a suicidal political move if you think the Lib-Dems are after 'centrist' socially progressive votes, but in reality almost all of the Lib-Dems' priority target seats are Tory-held constituencies in the south and in suburbia.

Are they attempting to portray themselves as "more Tory than the Tories" in order to poach Tory target seats?

With the Lib-Dems there's always the strong possibility that whatever they're doing is the result of abject strategic incompetence, but in this case it does seem possible that they're attempting to resuscitate Cameroonian austerity extremism in order to woo voters in these marginal Tory seats.

Remainer doublethink

What the Lib-Dems clearly haven't considered is how their efforts to reanimate the political corpse of austerity is going to come across to the other core demographic they're targeting: Remainers.

For the last three years Remainers have been arguing against Brexit by saying it would mean "more austerity"*, so how on earth can Remainers even try to square this austerity is bad anti-Brexit argument with the Lib-Dems' stated economic policy of delivering ultra-austerity forever?

If you see yourself as a socially progressive 'centrist' type, who opposes Brexit because of the disastrous effect it would have on ordinary British people, how on earth would it be possible to support a party that's going to push ruinous austerity extremism even harder than Cameron and Osborne did?

Orwellian doublethink seems like the only plausible answer.

Conclusion

The Lib-Dems haven't just learned absolutely nothing from the two thoroughly deserved electoral kickings they've taken in 2015 and 2017, they've somehow convinced themselves to believe the polar opposite of the lesson they should have learned.

The obvious lesson they should have taken from these electoral routs is that they colluded too closely with the Tories, and that austerity extremism was a social and economic disaster that they should apologise for.

They should have not just apologised for the dire destruction in living standards that austerity delivered, but for the fact this austerity living standards collapse contributed directly to their own worst nightmare of the 2016 Brexit vote.

But what they've actually convinced themselves to believe is that the 2010-15 pre-Brexit period was some kind of magnificent utopia, and that the only way to return to those marvellous glory days is to dig up all the corpses from the austerity graveyard and reanimate them as ultra-powerful austerity zombies!

They're trying to bring back their own personal glory days by returning to the very stuff that actually brought their party crashing down!

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* = The Remainer argument that "Brexit means more austerity" is every bit as dishonest as the Brexiteers' "£350m for the NHS" ... and I say this as a Brexit-sceptic. Austerity is a policy of cutting investment in an economic downturn. It's an economically illiterate response to crises. The tried, tested, and proven response to economic crises is investment in stuff like infrastructure, housing, transport, manufacturing, services, skills and education (create quality jobs and modern infrastructure = create prosperity). No matter the scale of a Brexit economic downturn, austerity would always be the wrong answer, and anyone claiming it would be inevitable is guilty of legitimising the outright lie that austerity is the correct response to a crisis, when the slowest economic recovery in centuries and the worst period of wage decline since records began post-2008 is damning proof that austerity is absolutely the wrong one.

Here's an article on this tragic piece of remainer 'groupthink': Are you unwittingly guilty of spreading hard-right Tory propaganda