For how many years in the future will we be paying higher taxes to fund the planned UK spending spree?

In my opinion, Gordon Brown is the last person in the world we need to be embarking on a spending spree after his debacle in 2002 onwards.

He threw more money at Health and Education than they were able to cope with, and before he had thought about what he intended them to do with it.

Am I the only one who fears we will be paying for years ahead and have nothing to show for it again?

No, you are not the only one, you are right to be concerned, as I am.

You have already had one patronising response eschewing the virtues of Keynesian economic philosophy as a mechanism for dealing with the Credit crunch/recession. Lets knock that one on the head to start with.

Gordon Brown has thrown prudence on the scrap heap, abandoned his fiscal rules, and invoked John Maynard Keynes as his saviour. Basically, Keynes advocated during the 1930′s depression, substantial state borrowing to finance a programme of public works. It is this theory which Gordon Brown, like a desperate drowning man clinging to a twig, is now trying to implement.

The disastrous misconception, is that this policy was never tried in Britain, and was designed to deal with a set of circumstances wholly different to those faced by the Brown Government.

Back then, policy was that Government’s must always balance their books. Even so, back in the 1930′s when things were at their worst, borrowing did not exceed 1% of GDP. It is now set to exceed 10% under existing plans, without the future additional planned expenditure. This doesn’t include unfunded pension obligations and future PFI costs, bailing out the Banks, and these are absolutely enormous.

Keynes, was a fiscal conservative, and his model depended on an all powerful State to control inflows/outflows of Capital in/out the country. This is inconceivable in today’s globalised economy. The Keynsian world comprised economically isolated Nation States, which could be controlled more easily by the policies of each Nation State. Keynes himself admitted that his model could not work otherwise.

No, comparing Keynes to Brown is like comparing Scrooge to a Banker on Bonuses.

It is obvious that by aligning himself to Keynes, Brown is trying both to con the public, and at the same time, imply that his is the right course of action. It is also devious, because if the Tories challenge him, as they must, he will counter by arguing that they are supporting spending cuts.

The other thing to remember, is that the Brown borrow/spend plans are targetted at the already cosseted ‘public sector’.

We have to remember, that it was the low interest rate policy of Brown/Greenspan, and their ongoing failure to take remedial action, that enabled the credit boom to take place at all.

I still believe that in order to cling on to power, he could very easily bankrupt the country. We shouldn’t discount the possibility that this could be his real objective. Following such a disaster, we would be fair game to join the EURO and a Federal Europe.

If we do survive this, we will be paying for it for 50 years+. However, we will never know, because all this debt will be subsumed into overall Government debt.

Derek at the men’s health clinic – The Catherine Tate Show – BBC comedy

Comments are closed