On the radio this morning the new SNP leader Nicola Sturgeon pointed out what is patently obvious to almost everyone except the leaders of the other parties: that "austerity has failed." Yet all the others can offer is "more austerity."
Sturgeon advocates that, rather than further cuts, there should be a "modest " increase in public spending of 0.5% which, she claims, will free up an additional £180bn for "investment in the infrastructure, innovation and growing the economy."
I'm glad the penny has dropped for at least one leading British politician. I could almost wish there were SNP candidates standing here in Yorkshire.
Alas, her interviewer ("Today's"James Naughtie?) pointed out that this would involve further public debt and would "ask future generations to pay for our profligacy " (or something like that). And the Tories accuse the BBC of a left wing bias!
M/s Sturgeon didn't respond to these canards: maybe she didn't get the chance. But here, for the umpteenth time:
- with interest rates at an historic low this is a good time for governments to be in debt, and there are good reasons for being in debt as extra public expenditure will help revive the economy, create growth and jobs, increase the tax take, reduce expenditure on social security and thus reduce the deficit.
- public expenditure now will not place a burden on future generations. You can't consume today what is to be produced by the as yet unborn. This, as Professor Paul Krugman puts it far more eloquently that I, is "money we owe ourselves," here and now, not at some future date. If you don't grasp this* please, please, please see::http://krugman.blogs.nytimes.com/2015/02/06/debt-is-money-we-owe-to-ourselves/
* I've tried to explain this in an earlier post by pointing out that those of us who have taken advantage of Osborne's bribe by buying the pensioner bonds now hold part of the National Debt, and the interest we receive will be financed by the taxes we pay. In this particular case that does involve a generational shift since only the elderly can buy the bonds but almost everyone will pay the taxes. However most of the Nation Debt is owned by "everyone" in one way or another, through financial institutions, insurance companies, pension funds etc