Phoney Deficit Mania

Since the publication of the Con Dem Autumn Statement a new reverse paradigm has been introduced into the economic debate in Britain - cutting the deficit versus borrowing. Self serving Tory assumptions about the need for permanent austerity rule the roost. The deficit must be solved, taxation on big business and the wealthy must be minimised, public services outsourcing should be extended to everything but core functions and, of course, public sector pay should continue to be held down despite 6 years of wage stagnation.

Seumas Milne, writing in today's Guardian, challenges this new orthodoxy using the ample evidence of failed austerity policies since 2010: 'where Cameron, Osborne and their friends have succeeded, of course, is in convincing large numbers of people that Labour spending was somehow responsible for the crisis – which it wasn’t – and in turning the budget deficit into the central issue of economic policy – which it isn’t. In reality, the deficit was below 3% when the crisis was triggered by a financial crash – and up to that point public spending under New Labour, at 38.7% of national income, was lower than under every other government since the 1950s. And the budget deficit is only a reflection of the real problems in the economy and cannot be controlled by the government, as Osborne has demonstrated so comprehensively'
http://www.theguardian.com/commentisfree/2014/dec/17/deficit-mania-political-fraud-osborne-economic-nonsense