The deficit has not been eliminated. Depressed living standards are barely rising. This is not ‘job done’, but a record of failure, writes William Keegan.
The austerity panic propelled the economy back into depression; and, far from using public spending as a countervailing force against the cutbacks in private sector investment, the coalition’s budget cuts served to aggravate the crisis.
This year’s Reith lecturer, Dr Atul Gawande, speaks of the twin problems of ignorance and ineptitude that can beset medical practice. This applies also to economic policy.
Osborne, on the verge of his last autumn statement before next May’s election, has ended up with the worst of both worlds: he is being widely criticised, indeed derided, for having failed lamentably to achieve his target of eliminating the budget deficit during the lifetime of this parliament. Yet the austerity that he introduced so dramatically, epitomised by the emphasis on premature deficit reduction, has brought us the slowest economic recovery on record, and deep dissatisfaction all round with the depressed state of living standards.
There are commentators who place their faith in the Bank of England’s growth forecasts, and the belief that average earnings will finally take off after a long period of falling and then stagnating. Yet, even if they do, the starting level is so low that Osborne is hardly going to be in a position to repeat that dreadful phrase “job done”.
And what does our imperturbable chancellor promise if the government is re-elected? More of the same: austerity for the poor and public services, and tax cuts for the better off. But austerity fatigue is setting in: even the man responsible for control of public spending, Treasury chief secretary Danny Alexander, has made it plain that enough is enough, and the Conservative plans are “eye-wateringly unfair on the working poor, who will pay the highest price.”
The coalition has led this country into an austerity trap. No wonder the Conservatives are worried that UKIP may unseat them.
There’s much more good material in this article – much of it about Gordon Brown (don’t look so surprised). You are encouraged to visit it on The Guardian‘s website.
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