Skip to main content

Simply cutting the deficit is a poor economic goal

It is relatively easy to create an economy that works for the rich but it is difficult to create one that works for the poor.  But it isn't rocket science. The huge public investments in health, education and housing in the three decades following world war two demonstrated it can be done, lifting people out of poor housing and providing them with opportunities in education and work inconceivable before the war.

The Tories and the Tory government, as did the Tory-LibDem coalition have instead targeted the deficit. They have not learned from history.  Despite Britain being bankrupted by the war, and inspire of massive national debt, both Labour and Tory governments invested in social infrastructure and welfare - more so did Labour.  As the economy grew, the national debt fell precipitously. A healthy workforce became a more productive one; a skilled workforce become a more adapted one.



Yet, now, cutting down the deficit has become an objective for a 'strong' economy with robust growth, but it is growth predicated on making the disadvantaged poorer.  The government hails middlingly small growth as a sign the it is working.  It isn't. Not for the poor it isn't  Furthermore it is poor economics whether or not you care about the poor.

 This is why we need a more balanced economic strategy. Growth is necessary, but not sufficient as an answer.  We need also a social strategy.  Simply putting the nations finances 'in order' is not in itself an answer. A family could have a healthy balance in the bank but if the roof leaks it is more damaging than if the family had borrowed money to repair the roof.

Putting the nations finances in order is also used by the Tory government as a cover for an ideological attack on the poor, but not on poverty.  First they create a narrative of the 'undeserving', 'work-shy' poor.  The Secretary of State for works and pensions has used this language time and again.  They also talk of 'helping the poor help themselves'.  The truth is that the vast majority of those receiving benefits are in work.

Another part of the narrative is what is called 'welfare dependency' as if those on benefits are on a kind of benefits drug from which they have to be weaned with cold turkey.  And so it is with working tax credits.  Government ministers say that somehow this will miraculously increase wages.  Yet, there is no process in any economic text I know that demonstrates this principle. The one I do know is that if you cut benefits to the poorest without lifting their wages then they will be pushed deeper into poverty.  They won't be able to afford their rents and so are more likely to become homeless, their health will deteriorate and we end up with a poor, unproductive, unskilled workforce.  It is simply bad, bad, bad economics.

The government has no social agenda other than that of a Victorian era of 'self help'. But even the Victorians began to understand the importance of public health and invested in infrastructure to promote it.  This government has lost sight of the social goals of good governance.  To create health and wellbeing. It follows bad economics for bad social reasons. It pushes the poorest deeper into poverty for the sake of the illusive goal of 'cutting the deficit'.   Cutting the deficit is a poor economic goal.

 

Comments

Popular posts from this blog

Ian Duncan-Smith says he wants to make those on benefits 'better people'!

By any account, the government's austerity strategy is utilitarian. It justifies its approach by the presumed potential ends. It's objective is to cut the deficit, but it has also adopted another objective which is specifically targeted. It seeks to drive people off benefits and 'back to work'.  The two together are toxic to the poorest in society. Those least able to cope are the most affected by the cuts in benefits and the loss of services. It is the coupling of these two strategic aims that make their policies ethically questionable. For, by combining the two, slashing the value of benefits to make budget savings while also changing the benefits system, the highest burden falls on a specific group, those dependent on benefits. For the greater good of the majority, a minority group, those on benefits, are being sacrificed; sacrificed on the altar of austerity. And they are being sacrificed in part so that others may be spared. Utilitarian ethics considers the ba

The secret life of Giant Pandas

Giant pandas, Ailuropoda melanoleuca , have usually been regarded as solitary creatures, coming together only to mate; but recent studies have begun to reveal a secret social life for these enigmatic bears.  GPS tracking shows they cross each others path more often than previously thought, and spend time together.  What we don't know is what they are doing when together.  Photo by  Sid Balachandran  on  Unsplash For such large mammals, pandas have relatively small home ranges. Perhaps this is no surprise. Pandas feed almost exclusively on bamboo. The only real threat to pandas has come from humans. No wonder then that the panda is the symbol of the WWF.  Pandas communicate with one another through vocalization and scent marking. They spray urine, claw tree trunks and rub against objects to mark their paths, yet they do not appear to be territorial as individuals.  Pandas are 99% vegetarian, but, oddly, their digestive system is more typical of a carnivore. For the 1% of their diet

Work Capability Assessments cause suffering for the mentally ill

People suffering from mental health problems are often the most vulnerable when seeking help. Mental health can have a major impact on work, housing, relationships and finances. The Work Capability Assessments (WCA) thus present a particular challenge to those suffering mental illness.  The mentally ill also are often the least able to present their case. Staff involved in assessments lack sufficient expertise or training to understand mental health issues and how they affect capability. Because of  concerns that Work Capability Assessments will have a particularly detrimental effect on the mentally ill,  an  e-petition  on the government web site calls on the Department of Work and Pensions to exclude people with complex mental health problems such as paranoid schizophrenia and personality disorders. Problems with the WCA  have been highlighted in general by the fact that up to 78% of 'fit to work' decisions are  being overturned on appeal. It is all to the good that they