Posted by: aboutalbion | April 8, 2015

From ‘stable economic platform’ to ‘long term economic plan’

These mantras from the past and the present remind me that a general election for a new central government in the UK is planned for Thursday, 7 May.

A decade or so ago, the last successful (Labour) Prime Minister used to point to his ‘stable economic platform’ as the backbone of the British economy.  But the British economy still crashed in 2007/8 because (I am told) bankers worldwide were bringing trolley loads of ‘dodgy’ debts to world markets and trading them as ‘sound’ investment opportunities … until someone, somewhere, had the common sense to say “No deal”.

And last Thursday, one national television channel managed to put all seven of the current party political leaders on the same platform at the same time for a two hour ‘debate’.  I viewed the last half of the broadcast, and I felt I was watching a ‘Who is my neighbour?’ competition.

Six of the party leaders seemed to me to be saying that, in varying degrees, they would bring the current regime of austerity to an early end, and that they would continue to aim to ‘balance the books’ either by raising taxes or by borrowing more money.  So in a sense, they were all neighbours.

This left the incumbent (Conservative) Prime Minister without a neighbour as he advocated a continuation of austerity in the company of his ‘long term economic plan’ as the necessary medicine for the British economy.  His stance came across to me as a mechanic who was saying that he was only half way through ‘fixing the British economy’, and that he should be allowed to finish the job – as the early indications were that his ‘fix’ was ‘working’.

Sadly, not even the incumbent Prime Minister could bring himself to say that when the ‘fix’ is completed, the National Debt will be something like £1.5 trillion – which costs (in interest payments) approaching £50 billion each year.  Over time, UK governments of all colours have borrowed money from ‘investors’ to finance the construction of what they think of as a top-notch common life for UK residents.  But is it sustainable?

For me, a suitable question at this general election season is, “Does the National Debt have to be repaid?”

If the answer is “No”, then I find it difficult to see the National Debt as ‘proper’ money, or ‘clean’ money, or as anything other than ‘dodgy money’ or ‘funny money’.  In which case, there is surely a risk that investors will change their minds and one day will refuse to re-finance redeemed UK bonds.  What I seem to hear all politicians saying is that, providing we keep paying investors whatever they want in interest payments, then we will never have to repay the National Debt itself.  Really … ?

Since all politicians speak of the UK’s honourable behaviour in the bond market, maybe the answer is “Yes”.  If the answer is “Yes”, then I find it difficult to see the UK as a ‘free’ country.  I think this because, when the National Debt (say, £1.5 trillion) is averaged out over the UK population (say, 60 million), the amount that has to be repaid is of the order of £25,000 per head.  To me, this feels less like freedom and more like slavery.

What I see, and read about, in the UK seems to confirm that austerity is increasing the proportion of the UK population who are sliding, against their wishes, into what genuinely feels like slavery.  Not classical slavery where a slave’s body is ‘owned’ by another, but modern slavery where a slave’s time is owned by another.  On this view, austerity turns out to be the price that the UK has to pay to investors to keep them buying UK bonds.

A slave is unlikely to vote for slavery.  But the UK has the totemic National Health Service which offers medical treatment (within limits) free of charge at the point of delivery to all, slave and free.  And this explains to me why there is so much passion around the future of the NHS.  It is the national tangible token of equality for all in an increasingly unequal country.  So, as I have probably written before, the most interesting result at the end of election night will be the percentage of the electorate who choose to vote this time round.

So far as I can see into the future, neither ‘stable economic platform’ nor ‘long term economic plan’ can shield the UK economy from sudden world-wide disruptive forces … rather like the weather.


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