The Daily Mail, in an appalling diatribe this morning, argues that because in real terms public spending in 2014 will be at the same level as 2008 there is nothing for anyone to protest about.
The numbers are correct of course:
The headline numbers are right.
But there is still a problem with them:
But the fallacy is in assuming that the composition of the numbers in 2014 is the same as in 2008. Just look at the composition of spending in 2014 compared with 2008. Interest charges will be much higher.
Indeed.
The problem is, as that interest number is telling us, is that we now have to pay for the money that G. Brown has already spent. That\’s why total spending will be static (ish) while spending upon current activities will fall.
Because the money\’s already gone, innit?
The philosophy – no, I guess, doesn’t do that, let’s call it the thinking – oh , wait.
Well, whatever, Mr M’s comments are quite scary when you analyse them.
One has to conclude that he believes (I knew I’d find a word to describe how his brain works) that the cost of borrowing is irrelevant. Which certainly makes the socialist attitude to debt more understandable.
The interest element of public expenditure is what it is and must be paid somehow, without impinging on “worthwhile” expenditure.
So it doesn’t matter how much money a government spends because the cost of borrowing it will always be found from somewhere.
Now that Ritchie has sketched out the dots maybe he could have the intellectual integrity to join them up:
Reducing the deficit and government debt are good things because you stop wasting money on interest costs.
Ergo the Coalition is right.
Borrow more. Simples.
But… but… what about the magic money tree? The one in the Bank Of England? How can anyone be so cruel as to not collect the notes that fall from the tree, and give them to Mr Murphy and his friends? Have you no heart?
come on Dunc or Chris will be along to tell how everyone apart from themselves can afford it….