How the ‘unforced error’ of austerity wrecked Britain

https://www.theguardian.com/politics/ng-interactive/2024/jun/28/how-the-unforced-error-of-tory-austerity-wrecked-britain

by EwokSuperPig___

7 comments

  1. Labour left the country in a state that austerity was necessary.

  2. Britain was wrecked by the 07-08 financial crisis.

    Austerity, Brexit, Truss – all symptoms of that.

    We built over 30 years a castle on sand, an economy too dependent on the City and risky finance. Until we address that and rebalance, things are only going to keep getting worse.

  3. Austerity was a lifestyle choice inflicted on the masses by an alleged pigfucker, knowing it wouldn’t affect him or his ilk. Who Then decided for a giggle to have an ill advised referendum when already deeply unpopular without setting any safeguards,realised he might have to implement it and fucked off to lobby for cash before returning to the sinking ship hoping for a knighthood before it sinks.

  4. “At the time, this looked like an obvious macroeconomic error”

    What utter bullshit. The Guardian were telling people to vote Lib Dem because Gordon Brown had mismanaged public debt and supported austerity light politics up until Corbyn. The only parties consistently calling it bollocks were the SNP and Greens.

  5. Austerity is really just rebranded upwards redistribution of wealth, justified by using the three-braincell ‘eCoNoMy is lIkE hOuSeHoLd bUdGeT’ argument.

    Friedmanite/Chicago school economics quite deliberately obfuscate the role and capacities of the state in order to justify anti-working-class economic policies. National debt is not, in reality, a debt in the way that you or I would be in debt to a bank – it’s not money that has been ‘lent’ by one person to another, with an expectation of repayment-plus-interest. Totally unlike you or I, states have the capacity to expand their own money supply (‘printing money’). The ‘national debt’ is simply a number that records the total amount of money printed. The fiction is that this is ‘debt’ in the abstract sense, borrowed against ‘the future’, in which it ‘has to be paid back’, for… reasons.

    The idea the national debt ‘has to be paid back’ is ultimately just bobbins, a fantasy that becomes a self-fulfilling prophecy which spooks the fat-cats themselves into faking out confidence in the stock market. Yes, the government is constrained by the effect that total money supply has on the economy – but this is again enormously overexaggerated by the Chicago school (if you wish to see how disastrous monetarist policies are in practice, see the total economic devastation wrought by Thatcher’s first three years in office, in which a faithful monetarist policy produced total economic stagnation and rocketing unemployment). The fear of the national debt is wholly a psychological trap of their own making. Indeed, the post-2008 system would be utterly unsustainable if it actually worked in the way the Friedmanites suppose: ‘quantitative easing’ (without which governments would be highly illiquid) involves central banks effectively pouring money into the financial system.

    Which, of course, is fine when the money goes directly into bankers’ pockets – but somehow deeply evil when it goes into healthcare or education.

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