Tuesday, 25 November 2014
Why Britain Is Still In Debt.
If, as George Osborne and David Cameron claim, the British economy is now recovering and if, as they also claim, the deficit is falling then why is Britain's national debt continuing to mount? In 2008 the national debt stood at £530 billion but is now standing at £1.7 trillion. Why? Well to begin with the deficit is the difference between what Britain produces and what Britain spends. So, even if the deficit is falling, the national debt can continue to grow - spending more than you make even if you reduce that spending will still put you further into debt. Yet if we are making more, as the so-called "recovery" takes hold, and spending less, especially on social services, why is the national debt three times what it was in 2008 and still climbing? The answer is in two parts. First the much-vaunted "recovery" is nothing of the kind with much of it based upon a rise in property values which feed into the GDP figures. These rises are mere illusion and are based on nothing more substantial than what people believe property is worth. It's not as if houses in this country have suddenly become more productive or increased their efficiency - they remain simply bricks and mortar. Osborne and Cameron have also used an economic sleight of hand to bolster their claims to a "recovery" by fiddling the figures and including estimates on the value of the black economy - such things as prostitution, drug dealing and money laundering. Yet the suffering caused by cuts to spending on social services - unemployment and sickness benefits and the the so-called "Extra Bedroom Subsidy" - have been very real and so too, you would think, would be the effect on the national debt. So, where has all the money "saved" gone? Much of it has gone into subsidising business through working tax credits as wages continue to fall. In other words we, the taxpayers, have been paying ourselves so that the rich and greedy don't have to. A great deal of it has gone on "quantative easing" - the new socialism for bankers which rewards them for being rich and greedy and also for being utterly stupid. Much of it has gone in the form of tax breaks for the rich and greedy so they will come to Britain and be as rich and greedy as they like. In other words a great deal of Britain's GDP has been transferred from the poor to the rich by circuitous and devious routes and we taxpayers, too poor to actually give the rich loads of ready cash, have effectively been forced to borrow the money in order to give it to them. To add insult to injury the people we've been forced to borrow the money from are the very bankers who got us into this mess in the first place. And that, ladies and gentlemen, is why Britain is still up to its neck in debt, why you and I have been forced to foot the bill and also how the Tories have turned socialism on its head.