Bad times behind and ahead for Greece and the rest of Europe too, us in the UK particularly. Predictably enough to everyone except politicians, apparently, the austerity neasures adopted first in Greece and then here in the UK have resulted not in Greece leaping like Prometheus unbound from the depths of the recession but finding themselves in even worse straits instead.
All this is inevitable as austerity measures are a two-edged sword; not only do they reduce public spending on the one hand but they also reduce private spending as its implementation means people simply haven’t got the money to spend. The one thing it does do is make the rich richer by comparison by making the poor even worse off than they were previously. It’s difficult not to think that the motley crew of public schoolboys and old Etonians in government aren’t fully aware of this even if the broader public aren’t.
Education Secretary Ed Balls suggests he’ll be making significant savings by combining schools into some kind of federation meaning he’ll be able to sack any number of heads and deputy heads. How is this saving money? All those heads and deputy heads won’t be working and contributing to the economy any more. Instead in all likelihood they’ll be claiming benefits and costing the country money instead. They won’t be spending money in their areas so they won’t be putting more money into the butcher’s pocket so he’ll have less to put in the baker’s pocket and the candlestick maker will no doubt feel the brunt as well. They’ll all be paying less taxes, needing less support staff and facilities, less advertisements and so forth. In short, cutting jobs is a surefire way of shrinking the economy. I thought we were trying to expand it?
How is any of this making savings? The answer is that overall it isn’t, not when you think about it in context. If Minister Balls hopes to impress then he appears to be relying on the electorate not giving the matter any proper consideration. It’s entirely unsound economics, it only appears to have any significance if it’s viewed out of context. Put it in its true context and it causes more problems than it might solve.
Anyway, like all the other much-touted plans being made by the various political parties, more taxes here, less public services there, it’s real purpose is to maintain the illusion that the growing debt mountain can be solved by prudent budget slashing. Belts would have to be tightened so much that nether regions would disappear into other dimensions. Public borrowing is growing at such an increasing rate there’s little doubt by the next election it’ll be obvious even to the illiterate and innumerate that the sums involved are far too large to ever be addressed within the economic system we have. It always had a mathematical sell-by date built-in to it, it was never a practical long-term proposition, and now it’s broken. We need a new one. On that disconcerting subject, all commentators are mute. What do we replace the banks with?