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There is an alternative

I am always suspicious of political arguments that suggest there is no alternative. There is always an alternative; the question is which is the best alternative. When the 'no alternative' argument is deployed it usually suggests a fundamental weakness of the position; it is an argument from weakness, not strength. And so it is with the arguments deployed this weekend by the government in the wake of the loss of the triple A rating for the economy.

All governments whether Labour or coalition would have to 'tackle the structural deficit' Mr Cable told us. As if this suggested there was no alternative way to deal with it. What we know is that the coalition adopted a savage strategy of cutting spending to 'deal with the deficit', and they did so without a clear strategy for growth. The alternative would have been to make growth the priority rather than cutting the structural deficit; such a strategy if it worked would have cut the deficit by increasing revenue. As it is, the cuts in spending have reduced revenue and made the deficit worse not better. There is an alternative.

The government also adopted a position determined to protect the triple A rating. This was an absurd approach. Now Mr Cable tells us that it doesn't matter; it is merely symbolic. Indeed it is; so what it means is that the slash and burn of public services has been about protecting something that was simply 'symbolic'; a kind of macho economics! The poorest have suffered for a symbol. Again there was an alternative, which was to consider policies that would deal with the structural deficit through growth and income and not blindly savage cuts.


Mr Cable likes to set up an Aunt Sally that is easily knocked down. He likes to suggest that the alternative would be to 'simply spend our way out of trouble', which won't work. But that is not the alternative, although I suspect the coalition as they panic in the approach to 2015 might just adopt such a strategy. It would, of course, be irresponsible. No we can't 'spend our way out of trouble' but what we can do is be strategic about spending. We could recognise that not all spending is 'bad'; some is vital to oil the wheels of the economy and increase revenue.

It will be interesting to see what strategy Osborne adopts in the coming budget, but I bet there is an alternative. Let's see.

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