It’s the Rich What Gets the Pleasure……

[TrueBlueTerrier]

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You don’t own debt it owns you, somebody once said. Concern about personal indebtedness fuels the debate about the economy.

The fears of ordinary people about their personal finances are being used to encourage the idea that the UK economy is sinking under a sea of debt.

If we are not careful, commentators would have you believe that before long we would be all drowned in an ocean of finance.

Until a few weeks ago, it was widely understood that the irresponsibility of the banks and financial institutions had created the recession. Yet suddenly, almost as one, the media decided that the real problem was a massive overspend in the public sector requiring “savage” cuts. The International Monetary Fund estimates that the UK banks bail out cost £175 billion. Some of this will come back, but the losses to the taxpayers will be between £20-50bn.

As Ken Livingstone recently pointed out in the press, public finance has deteriorated for two reasons. First, bailing out the banks and their shareholders has cost us nearly 9.5 per cent of the GDP in the current financial year. Secondly, the collapse in economic growth has meant that tax revenues to government have fallen by 3.4 per cent of GDP.

These two items, the fall in tax benefits and the bankers’ bailout, far outweigh the rise in state benefits as people lose their jobs.

There are areas of genuine waste in proposed public spending which could be cut. The proposal to issue everyone with ID cards will cost £5.6bn. Or how about recognising that nuclear weapons are of no value today, if they ever were? Scrapping the Trident replacement would save around £100bn over the lifetime of the system.

The only way out of recession is economic growth. The Government has to raise investment levels. It should order the banks to resume affordable credit to stimulate this investment. Investment is not credit that drowns us, it is our lifeline to an expanding economy.

There is a difference between debts arising from luxury consumption, as against debt arising from investment.
Economist Will Hutton recently wrote:
“Britain won wars, assembled an astonishing navy, built an empire and launched the industrial Revolution to become the envy of Europe, yet the national debt was consistently above 80 per cent of GDP. Nobody cared. High national debt was a precondition for winning two world wars in the 20th century. Periods when the over-riding preoccupation has been lowering the national debt have coincided with industrial, economic and strategic decline. So it will again.”

Quote
Rise like Lions after slumber
In unvanquishable number
Shake your chains to earth, like dew
Ye are many – they are few
Percy Bysshe Shelley
“The Masque of Anarchy” 1819


Well Read
Live Working or Die Fighting – How the Working Class Went Global by Paul Mason
“Juxtaposing local labour struggles in the early 20th century with grassroots movements for workers’ rights in today’s global south, Paul Mason reveals the profound continuity in the conditions, hopes and challenges of the international working class. This is micro-historical writing at its best.” (Walden Bello, author of Dilemmas of Domination
(Vintage U.K. Random House http://www.vintage-books.co.uk" onclick="window.open(this.href);return false;)

Posted by Billy Hayes | @ Fri, 9 Oct 2009 10:09:56 +0100

[stokes11eg]

Our billy does it again.A few 'quotes' by others and he's made a speech. Put him up on the smiley board, with Crozier and the rest----