Some of us have been saying this for years but here’s a big-league economist to back us up.
Remember all the talk about Labour having “Maxed out the national credit card” that David Cameron and George Osborne used to win just enough seats to form a coalition with oily Nick Clegg’s Liberal Democrats in 2010?
It was nonsense. I said it at the time (and many times afterwards in articles on This Site. You can’t compare a national economy with household income and expenditure.
But it seems people are still being taken in by it because the Tories are still using it as the basis of their economic model.
That is the reason the UK has fallen deeper and deeper into debt during their 10 years in office. We can only go into debt, while they continue to follow this course.
Richard Murphy explains it very well in the video clip but I’ll paraphrase: while households become better-off by restricting spending, the nation loses out because businesses don’t benefit from that spending and cannot pass the money on through the system – therefore the nation becomes poorer.
So, by restricting spending with austerity policies, the Tory governments of the last 10 years have starved the UK of its economic lifeblood and plunged us into trillions of pounds worth of debt.
The only way to improve our economic situation is by spending into the economy with wise investments that help it to grow.
But Conservatives simply do not understand this basic (macro)economic fact. They never have.
See for yourself:
Some households fared well during the first Covid-19 lockdown. The lack of any way to spend their money meant they were able to pay off debts and bank spare cash.
But that won’t last. In some cases, families are already suffering because their income has fallen below their outgoings and the lockdowns are still going on.
In fact, the Tory plan is to ensure that they leach that money away from all of us as soon as possible.
There is nothing you can do about it in individual households because the household unit is too small to stave off economic intervention from a national government.
But if you group together with others, you might find a way.
Alternatively, you can just stick your head in the sand and wait for Rishi Sunak to empty your bank account and steal your house. It’s up to you.
You’ll probably see the sense in these words on March 2, when Sunak announces his spring budget.
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