Wednesday, 8 October 2014
Clegg shows courage, but not enough.
On Sunday Andrew Marr challenged Nick Clegg with the question: "Surely that means you'll have to raise taxes?"
"Yes, of course!" was Nick's prompt response: no hesitation, prevarication, evasions or avoidance - and he went on to list some of the taxes Liberal Democrats would like to increase (capital gains tax for one, reduction in pension tax relief for another.) In this and other interviews Nick showed himself to be direct, honest, brave, informed, unflappable and personable.
This morning a BBC presenter on Radio 4's "Today" programme stated, without any qualification, that everyone acknowledges further cuts in government expenditure will be necessary after the election, whoever wins. I sincerely wish that Nick's courage would extend to challenging this unquestioning acceptance of Tory perception management.
In an earlier post I've outlined how the two mildly expansionary Keynesian-style budgets introduced by the previous government actually had the predictable effect of both reducing the government deficit and generating economic growth, and how George Osborne's "austerity " equally predictably placed this recovery into reverse.
A friend, by no stretch of the imagination a Liberal Democrat, has drawn my attention to this further evidence, from Australia, that Keynesian stimulus of the economy still works.This quotation is directly form an article by Aditya Chakrabortty in September 2013:
Australia is now enjoying its 22nd year of growth: during the Great Recession , the country managed to avoid any recession at all. How? By warding off a global downturn with what Nobel prize-winning economist Joseph Stiglitz described as "probably the best designed stimulus package of any. . .advanced industrial country, both in size and in design. . . .
Using the cry of "go early, go hard and go households" Rudd [Australia's prime minister at the time] chucked a total of A$52bn (£30bn) into the housing market, into refurbishing schools and roiling out broadband and other public works. He even dolled out money, in the spring of 2009 giving the typical single worker A$900. . .The result is an economy in enviable nick,(my emphasis - pun accidental but very convenient) especially compared with other rich economies.
So Nick, along with much needed tax rises for those at the top of the tree, and modest tax cuts for those fortunate enough to pay income tax, lets have some cuts that will help everybody (how about VAT back to 15%, which will really stimulate demand) and a public works package which will generate jobs and incomes, increase tax receipts and so reduce the deficit whilst at the same time enabling us to to continue to provide a civilised social security safety-net.
You've shown yourself a man of courage. Now have the courage of our party's historic convictions.