back to article Why is that idiot Osbo continuing with austerity when we know it doesn't work?

That austerity doesn't make the economy grow, is one of those things we all know to be true. And yet we've also got a government insisting that a recession, when there's spare capacity and we'd really rather like the economy to grow, is a great time to be cutting government spending and thus instituting that austerity. This …

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  1. Lodgie

    An entirely unconvincing argument, it's more of a leftie luvvie rant than solid fact based journalism.

    1. Gordon 10
      WTF?

      wtf

      Tim a leftie luvvie? You b'aint from round ere are ye boi?

    2. Vladimir Plouzhnikov

      @Lodgie

      Did you actually read the article or only the title?

      1. Lodgie

        Re: @Lodgie

        Just baiting :)

    3. Squander Two

      Stupidest comment I've read in weeks, but I'm upvoting it anyway for sheer entertainment value.

  2. Forget It

    And the seven thin and ill favoured kine that came up after them are seven years; and the seven empty ears blasted with the east wind shall be seven years of famine.

    http://en.wikipedia.org/?title=Miketz#Fourth_reading_.E2.80.94_Genesis_41:53.E2.80.9342:18

    1. This post has been deleted by its author

  3. Mike Street

    Another Example

    Do we not have another example of Keynesian stimulus across the Atlantic?

    Deficit spending in the USA created lots of jobs - though maybe not so many proportionately as 'austerity' did here in the UK. But the cost was enormous. At one time I worked out that it took $1m of stimulus to create each job.

    Unless you have China willing and able (and, because of their surplus, almost being obliged to) underwrite this, I can't see how it is possible for any other country. It is not even sustainable for the USA.

    Keynes' ideas seem not to work at a level which makes then anything other than interesting theories, not capable of application to the real world.

    1. Anonymous Coward
      Anonymous Coward

      Re: Another Example

      "Deficit spending in the USA created lots of jobs - though maybe not so many proportionately as 'austerity' did here in the UK. But the cost was enormous. At one time I worked out that it took $1m of stimulus to create each job."

      As well as being expensive for the US, it's not actually fixing the underlying problem; debt.

      At least over here in the UK we seem to be heading towards being able to start paying off the national debt. Deficits are like chocolate; too many of them and they make you sick. The UK government decided not to risk a total bust. Thus far there seems to be no end to the US appetite. All that chocolate has to go somewhere someday...

      The other thing I like is a law prohibiting deficit spending. It will be an unusual feeling for a population, one with the ultimate in political honesty. A government does well, tax can go down. A government does badly, tax has to go up to cover it. A government wouldn't be able to cover up inefficiencies by simply borrowing more; it would ultimately have to get the population to pay for those inefficiencies. And everyone would know why. Similarly if there's a grand national project, everyone would feel like they're investing in it.

      Consequently it would become really important to pay attention to politics. Voting decisions would result in personal financial consequences quite quickly. That would be good for democracy.

      In contrast, at the moment you have to wait for an economic cycle to reach a point of going bust to realise what poor political choices mean to one's own pocket. Consequently a careless or missed vote doesn't have a strong relationship to one's own income, so it's understandable that people don't really care.

      1. Mark Wilson

        Re: Another Example

        I tend to favour the limiting of taxation and government taxation to a set percentage, during times where the economy does well they can get a surplus and invest for times of recession. Only in times of emergency should the government be able to whip out the nation's credit card. The fact that this year the Adam Smith Institute calculated Tax Freedom Day to be 31st May speaks volumes meaning that approx 5/12 of people's salaries will go on government spending.

        1. Gordon 11

          Re: Another Example

          The fact that this year the Adam Smith Institute calculated Tax Freedom Day to be 31st May speaks volumes meaning that approx 5/12 of people's salaries will go on government spending.
          Assuming I live to be 84 (so I can deal in ℕ not ℚ) that means the government will tax me for 35 of them. Given that I was in education until 24, would (hopefully) receive a pension for 19 years and (again hopefully) be covered by the NHS for all 84 I reckon that's not a bad deal.

          People point out how much tax is paid, but not many bother to see what you get back for it.

          1. Mark Wilson

            Re: Another Example

            Taxation is far more than just income tax, even as a child you would have been paying VAT, that will continue into your retirement, as will fuel duty, road tax. Assuming you buy things from profitable companies, there will be corporation tax due on their profits, you may not be liable for that but is you who pays it. If you go on holiday by plane, you are taxed to use the airport. Depending on your value, you may even be taxed for your death. If you buy a house, there is stamp duty to deal with. Do you smoke or drink, don't forget the tax on that too.

            After all that, the government still doesn't have enough money to pay for everything so since the early nineties governments have borrowed money, sold off the nations assets, etc... to fund the difference. Eventually we run out of assets to sell and max out the credit card, at that point you get the Greek situation. The reality is we need to look very carefully at the services government provides and get rid of some or improve the efficiency of others until we get to a point that we can afford.

      2. Cynic_999

        Re: Another Example

        "

        A government wouldn't be able to cover up inefficiencies by simply borrowing more; it would ultimately have to get the population to pay for those inefficiencies. And everyone would know why.

        "

        No, people would *not* know why. The government would blame rising taxes on paedoterrorists or the Russians or the Chinese or global warming. Or maybe pretend that they have not really raised taxes at all, but simply changed the structure or withdrawn a government service that we now have to pay for. The things that governments are *really* good at is obfuscating the true facts and finding scapegoats to cover their mistakes.

      3. Tom 13

        Re: Another Example

        You'll get better responsiveness when everyone actually shares the burden of government equally. What we have instead is a system in which almost half the people bear no burden for government and that half insists that the half that does doesn't bear the burden.

        While I admit the idea of prohibiting deficit spending, I believe it has to be there for true emergencies. The problem is, too many foreseeable expenditures keep getting classified as "emergencies". Until we have more honest pols there's no law that will get us out of our conundrum. Yeah, I know. They'll be selling ice water on all levels of Hell except the one that's looking for hot tea before that happens.

    2. Adam 1

      Re: Another Example

      >At one time I worked out that it took $1m of stimulus to create each job.

      Accepting your calculations at face value, I think there is an underlying assumption in your conclusion that you may want to consider.

      How many billions was it worth to avoid a total collapse in jobs? Have you subtracted this from the cost of stimulus?

      1. Sir Runcible Spoon

        Re: Another Example

        If pretty much the whole developed world is in debt, who owns this debt? The banks?

        Since the weeds that are choking the flowers is interest payments, perhaps we need a UN led initiative to allow a certain amount of 'recovery' time to re-stimulate the world economy.

        E.g. An interest free year on national debt for ALL countries.

        Obviously not going to happen, but perhaps it's time to start thinking of what can be done on a larger scale than trying to sort this out at a national level.

  4. Anonymous Coward
    Anonymous Coward

    Quite disappointed to find this sort of left wing clap trap in the register - reads more like something out of the socialist worker. If you are going to print this sort of thing, at least also get someone who knows about economics to write a counter argument.

    1. Frank Bough

      As if...

      No-one knows about economics, least of all economists. Sad that the BBC are in thrall to these people, who are nothing more that meta-analysts. Remember how much economists like Gordon Brown? Yikes.

    2. John H Woods

      "Quite disappointed to find this sort of left wing clap trap in the register - reads more like something out of the socialist worker." --AC

      Quite depressing that you and your upvoters think that simply calling something "claptrap" is an effective counter-argument. It also suggests you didn't quite read the article in its entirety, or at least that you didn't quite understand it.

      1. Tom 13

        @John H Woods

        It is actually all claptrap. Keynesian economics was shot dead with a double-barreled shotgun on the watch on one James Earle Carter. The signs and portends had been visible since one Richard Milhous Nixon famously proclaimed "We are all Keynsians now," but no one wanted to admit it. But with both unemployment and inflation headed for the stratosphere, Keynes' economic theory was quite, quite dead. it survives only because it gives leftists license to do things that can't be done in the real world, so they won't let it die. Chief amongst his lies is that government spending increases economic output and that's at the heart of everything Tim wrote here. So they keep propping him up like the Soviets propped up Lenin for 50 years after he was a corpse.

    3. Squander Two

      Again, I just had to upvote this comment. Yes, it's tongue-draggingly moronic, but it would be churlish to be ungrateful for such a good laugh.

  5. BB

    What the...?

    What is this trashy diatribe doing on The Reg? I thought this was a tech publication. This piece belongs in the Guardian or New Statesman.

    Message to Worstall: England voted and chose steady hands and smart minds over vacuous left-wing ideas.

    1. Paul Shirley

      Re: What the...?

      Or did England vote to avoid ukip replacing the libs in another coalition after believing all the black publicity? An absolute masterpiece of manipulation, blame the libs for everything then threaten the country with something much worse if they don't just vote Tory.

    2. Mike Bell

      Re: What the...?

      Nice troll, BB. I'm not entirely sure where Gideon's hands are, but they're not on a steady tiller.

      I wouldn't trust him to feed the cats when his wife is away. The thought of imposing austerity on defenceless creatures would surely be some kind of delicious temptation.

      As I see it, we need to utterly destroy our financial system, hit a reset button and start again. STOP private corporations (banks) from creating money with a government license. IF you're going to dump oodles of cash into the system (QE) just write a cheque to the people who are actually likely to spend it and actually need it, rather than making bankers richer (you & me). STOP pretending that the economy isn't ENTIRELY dependant on debt, and acknowledge that almost ALL money in the money supply IS debt. And as for the minority of people to whom this massive debt is owed, tell them that their investment hasn't worked out, sorry.

      Or something like that.

      1. Anonymous Coward
        Anonymous Coward

        Re: What the...?

        "just write a cheque to the people who are actually likely to spend it and actually need it"

        ISTM that an efficient way of doing this would be to put some more money into people's pay packets at the end of each month.

        1. MJI Silver badge

          Re: What the...?

          That is called tax less.

          And the higher starting tax rate helps a lot.

          (Originally Lib Dem wasn't it?)

      2. LucreLout

        Re: What the...?

        STOP private corporations (banks) from creating money with a government license

        This sort of nonsense has long been one of my red flags. Its observation tends to reveal an total lack of understanding of finance, economics, or taxation on behlaf of the poster.

        And as for the minority of people to whom this massive debt is owed, tell them that their investment hasn't worked out, sorry.

        And its always nice to be right, and have the poster deliver their own confirmation of said lack of understanding... Sorry Mike, but its back to the drawing board for you: your ideas, if implemented, would be economic armageddon and would impoverish the entire nation. Even Gordon Brown didn't quite manage that feat.

    3. Graham Marsden
      Boffin

      @BB- Re: What the...?

      > England voted and chose steady hands

      Howls of derisive laughter, Bruce!

      Do you know how many more votes the Tories got this time than last? 600,000. That's it. Thanks to our broken electoral system hat's all it took to give the Tories a "majority", even though they only got 37% of the votes.

      Meanwhile the SNP got 4.7% of the votes and got 56 seats, but UKIP got 12.6% and the Greens got 3.8% yet each only got *one* seat, whilst the Lib Dems got 7.9% and 8 seats.

      So, no, BB, England (or rather, the United Kingdom) did *NOT* vote for Call me David and Gideon, 60% of them voted for something else entirely, yet still we got this bunch of idiots who think that kicking the poorest in society and giving their rich mates all the money is going to make things better.

      1. Chris Miller

        Re: @BB- What the...?

        Our 'broken' electoral system did exactly what it's meant to do (with the occasional statistical fluke, like 2010) - deliver a working majority for the most popular party. People who hate FPTP never seem to specify precisely which system they think would be an improvement (perhaps some of them have read and understood Arrow's Impossibility Theorem, though I doubt it). But if we'd had absolute PR, we'd have a working coalition of Conservative, UKIP and Ulster Unionist MPs; whether or not you think that would be an improvement or have led to less austerity (except, presumably, in Northern Ireland) is a matter of taste.

        At the insistence of the LibDems the electorate were offered an alternative to FPTP just a few years ago. They roundly booted it into touch, much to the consternation of our North London 'opinion formers'.

        1. Graham Marsden

          @Chris Miller - Re: @BB- What the...?

          "Our 'broken' electoral system did exactly what it's meant to do [...] ensure that our two-party state system remains in place and ensures that people don't get a real choice"

          FTFY.

          > People who hate FPTP never seem to specify precisely which system they think would be an improvement

          ORLY? I could have sworn I've seen many posts on exactly that, but perhaps some people just don't read them (or don't want to read them?)

          Here, let me repeat mine (which I've posted before in these comments pages): Personally I think we should switch to a form of AV or STV system (like the one they use in Scotland!).

          At the same time we switch to an elected House of Lords where the seats are apportioned to Parties according to the First Choice votes expressed by the electorate in the election of MPs.

          That way we ensure that the MP in a constituency is actually chosen by a *majority* of the votes, rather than being the "least disliked" option, but the "revising house" represents the actual views of the population.

          PS as I've said before (also in these pages) the AV Referendum was a complete stitch up. We did not get a *choice* of what FPTP was going to be replaced by, we were simply told "it's either FPTP or AV" which meant that those who wanted some form of Proportional system were forced to vote for either of two choices, neither of which they wanted.

          1. Chris Miller

            @Graham Marsden

            So what would you have proposed for a referendum (apart from a single choice of 'Graham Marsden's guaranteed perfect voting system') - a list of 103 different and increasingly complex and swivel-eyed sixth form debating society solutions? At least then you could stand in the corner crying that the 'winning' result only got a minority of the votes cast and "it's so unfair" (© every stroppy teenager on the planet).

            I really do suggest you read up on Arrow's Impossibility Theorem, though I doubt you'd ever be able to understand it. I'll even Google it for you.

            1. Graham Marsden

              @Chris Miller - Re: @Graham Marsden

              Ah, there's nothing like reasoned and adult debate. Pity your post was nothing like reasoned and adult debate. Still, at least you don't call people by silly nicknames like Matt Bryant, so I suppose I should be thankful for small mercies.

              As to the relevant parts of your post, yes, I'm aware that no voting system is ever going to completely and accurately reflect the wishes of *everyone*, but you appear to be arguing that since it's not possible we might as well stick with FPTP on the basis of "well, it is broke, but we can't find a perfect fix for it, so let's do nothing at all".

              Naturally that suits the Tories and Labour fine because they know that they'll eventually get back in power by the principle of Buggin's Turn. Whether it's good for us, the people who they are supposed to be *serving* (not ruling) is another matter entirely.

        2. Yet Another Anonymous coward Silver badge

          Re: @BB- What the...?

          Actually replacing parliament by an absolute monarchy would produce a working majority for the most popular party. I don't think even Tony in his walking on water days reached the popularity rating of her-maj

        3. Terry 6 Silver badge

          Re: @BB- What the...?

          "deliver a working majority for the most popular party."

          Err no. At best, for the least unpopular outcome (i.e. compared to Lab/SNP or Con/UKIP coalition).

        4. Alan Brown Silver badge

          Re: @BB- What the...?

          > "At the insistence of the LibDems the electorate were offered an alternative to FPTP just a few years ago."

          The "alternative" was "meet the new boss, just like the old boss" - seriously, the _least_ proportionally representative (on a national basis) and most prone to confusion of all the PR alternatives.

          > "They roundly booted it into touch, much to the consternation of our North London 'opinion formers'."

          The electorate didn't even bother showing up for the most part (abysmally low turnouts do not a 'round booting into touch' make). I voted no because it's arguably worse (and far more suceptable to abuse in real world implementations) than the FPP system in place at the moment.

          It wasn't FPP vs Proportional Representation. It was FPP vs 1 variant of PR.

          The question needs to be "FPP or PR?", then "Which type of PR?"

      2. Steve Foster

        Re: @BB- What the...?

        Quoting the SNP vote as a percentage of the entire UK is disingenuous at best, since all of their candidates stood in Scotland, whereas the LibDems and UKIP were (generally) standing across the UK.

        The SNP share of the vote outside Scotland was negligible (if not outright zero), and their seats outside Scotland reflect that.

        The flip side is that the SNP result shows that the LibDems and UKIPs best options for increasing their seats is to persuade all of their voters to move into the same area, and then they'd win those seats.

        1. jonathanb Silver badge

          Re: @BB- What the...?

          The SNP vote outside Scotland was zero because they don't have candidates in other parts of the UK.

          1. Yet Another Anonymous coward Silver badge

            Re: @BB- What the...?

            >The SNP vote outside Scotland was zero because they don't have candidates in other parts of the UK.

            Which is a shame, many people in England support Scottish independance.

        2. Naselus

          Re: @BB- What the...?

          "Quoting the SNP vote as a percentage of the entire UK is disingenuous at best, since all of their candidates stood in Scotland, whereas the LibDems and UKIP were (generally) standing across the UK."

          Not really. They still received a disproportionately high share of the national parliament for their vote share. It took only 25000 votes to return an SNP MP at the last election; the Tories needed 32000, Labour 39000, the Lib Dems over 300,000 - and everyone else so many that it's beyond farce. 3.8 million Ukip votes for 1 MP? 1.1 million Green votes for 1MP...?

          The SNP did very well at the election, and dominated in the seats they stood in, but those seats are lower population than many South of the border and so their populations receive disproportionately high influence. The flip side of that is the higher number of total seats in England, which means that Scotland tends to get ignored completely; our electoral system rewards Scotland higher influence per vote, but lower influence per seat. And it's the seats that actually matter.

      3. Zog_but_not_the_first
        Thumb Up

        Re: @BB- What the...?

        >> Graham Marsden

        Upvote for making me laugh at the University of Woolamaloo (or Woolloomooloo, depending on your Aussie etymology) reference.

        1. Graham Marsden
          Happy

          @Zog_but_not_the_first - Re: @BB- What the...?

          No worries, Mate, but perhaps we can just call you Bruce?

      4. Dave Bell

        Re: @BB- What the...?

        The SNP didn't put candidates into every constituency in the UK. so the 4.7% figure is very misleading. Round figures, Scotland is 1/12 of the total UK population, so that 4.7% of the total UK votes is around 55% of the Scotland total.

        I'm wondering if I got that wrong now, there's a couple of reasons it's only a good guess. Checking for the Scotland results with the BBC, and the SNP got 50% of the Scots vote, a 30% swing in their favour, and 56 seats out of 59.

        When I first saw the handwringing about the 4.7% it was from a Conservative. It was entangled with English Votes for English Laws. It's all part of the routine misleading use of statistics to score political points.

        If that "Australian" voting system had been passed in that referendum, it wouldn't have made much difference, not when the SNP ended up with 50% of the vote in an FPTP system. Some SNP MPs would have been elected without second-choices even coming into play. And the low-ranked parties in Scots seats didn't generally get enough votes to make up the difference between the top 2 parties in a seat.

        (People could have voted differently in a transferable vote system that sort of guesswork can lead to whatever result you want.)

        If you want to look like an idiot, carry on talking about the 4.7& of the national vote that the SNP got.

    4. John H Woods

      Re: What the...?

      "England voted and chose steady hands and smart minds over vacuous left-wing ideas."

      Smart minds read articles fully and respond; vacuous idiots mistake obloquy for exposition.

      1. nematoad Silver badge

        Re: What the...?

        "England voted and chose steady hands and smart minds over vacuous left-wing ideas."

        The trouble with that argument is twofold.

        1) England is not the UK, and it was a UK election not an English one.

        2) The total percentage of the votes cast in the recent election (39.6) to the Conservatives means that 60.4% did not vote for all this austerity.

        As for the "steady hands and smart minds" a quick look at the recent "Vote yes in the EU referendum or get sacked" fiasco seems to show neither. Unless that is you think that a death grip on the rudder of a ship heading for the rocks is "steady"

        1. chris 17 Silver badge
          WTF?

          Re: What the...?

          @nematoad "60.4% did not vote for all this austerity"

          is it really so hard to understand that 60.4% of people voted for different parties with differing views & policies who did not want to join and form a coalition?

          39.6% of voters did, however, vote for 1 party and their policies and views. Like it or not, that 39.6% of votes was enough to secure a majority Government in our electoral system. The country has spoken!!

          1. issue-taker
            Pint

            Re: What the...?

            The country has at best mumbled drunkenly through a loo roll, ashamed to be heard in case its ideas might be inspected thoroughly and found to be baseless, incoherent and embarrassing.

            Brits collectively panicked and went for something like a status quo, if they hadn't already completely flipped out and done something, *anything* to change the record (well done Scots). As has already been said, that majority was won by having only 600k more tory voters than in 2010. That's a .8% increase in their vote share in 2015 over 2010, and of percentage of the entire electorate, that's about a .5% increase.

            The country has spoken!! In rounding errors, but it's burbling something. Are you paralysed by fear? Because the current establishment wants you to be.

        2. LucreLout

          Re: What the...? @nematoad

          England is not the UK

          While being obviously true, it is also obviously incorrect. Democratically the UK very much is England. If all of Scotland, NI, and Wales voted one way, significantly less than half of England voting the other way would win the day, provided the remaining voters made other choices.

          60.4% did not vote for all this austerity.

          We've not really had austerity at all yet. I know the left have made much noise about it, but increasing spending below the level of inflation isn't really austerity. That, however, may be expected to change come July 9th, when it is highly likely we'll see front-loaded austerity to reduce the size of the state - which on any reasonable metric, has become far too large and inefficient.

        3. issue-taker
          Headmaster

          Re: What the...?

          Furthermore, or should I say Worst-all -- turnout wasn't even two thirds. It went up 1% from 2010, to 66.1

          Of the two-thirds of possible votes cast, 36.9 was the tory improvement to 2010's 36.1. Comparing that, perhaps unfairly (Arrow's abloobloo) to the 75.6% of people allowed to vote (electoral 100% - tory 36.1% * 66.1%) who at the very least Could Not Bring Themselves To Vote Tory really dampens claims of legitimacy or public endorsement.

          One cannot and I shall not lay the blame for electoral disillusionment solely at the feet of tories (from the irish word for horse thief) the right (from aristocracy of the french revolution) or the man (from, like, patriarchy, man).

          I will lay the blame for us having to squeeze inadequate conclusions about political feedback in this country from measly rounding errors on old people (they like the colour blue) and our crappy, melodramatic electoral system (what's that, more constituencies changed to the left than changed to the right? better return a more right wing govt). Having a referendum on fixing the latter is one of the infinite Godel natures for our outdated society.

    5. issue-taker
      Coffee/keyboard

      Re: What the...?

      Odd that this article agitates the more emotionally motivated commenters. ~Tech~ as a cultural sphere is generally socially left ("reality has a well-known <s>liberal</s> <i>leftie</i> bias"). Sometimes economically centrist or right. That's two axes I'm discussing "wings" of political opinion on (politicalcompass.org)

      Worstall can be self-servingly rightwing, economically at least. He can be as flimsily factless as Niall Ferguson if you pay close attention or if he hasn't given himself enough time for this weeks columns. He once tried to completely dismiss Piketty's "Capital" in a single update for this column. Cunningly, by alleviating anglo countries of the charge of inequality by redefining "poor people" as people with only 5K in shares and dividends etc. Suddenly the rich of the wealthiest 75-95 percentiles looked less stupendously encumbered.

      And to fill space over at the FT, if I recall correctly, he sought to demonstrate that economic inequality, job instability and more rights for employer and corporation at the cost of the rights of the individual were good for an economy as a whole. Supposedly, Scandinavian countries, with their absence of a legally defined nationwide minimum wage and state-enforced employment contracts must be libertarian. He contrasted their economic performance with the supposedly "left-wing" romance, Mediterranean countries which aren't weathering the numismacide as well. Thus a victory for broadly right-wing, liberal (in the classical or non-usonian sense) policy, given scandis have healthier, longer-lived people, more productive economies, lower crime and unemployment yadda yadda.

      Never mind that with a little more digging or a little less malignant misinformation he could have found these Mediterranean countries -- he focused on Italy -- are pretty much policy-wise on a par with us brits. And crucially, that scandis are ethereal elf-people super-socialists with their minimum wage set by yearly collective bargaining, so as not to be thwarted embarassingly by inflation on a regular basis, like below average earners are here. And that in fact they are the hardest employees to terminate in the world, because of more collective bargaining and a history or well-regulated unionism.

      Job security and steady compensation make a happier, more productive workforce, but that was an inconvenient conclusion for Worstall and his FT readers to reach. After all, they regard themselves as the deserving, wryly fondleslab-perusing upper echelon of a splendidly isolationist technocracy. Fact me in my poverty spout oh yes.

    6. Alan Brown Silver badge

      Re: What the...?

      "England voted and chose"

      England chose nothing. Britain did - and the results were close enough to be in the noise. Noone has a clear mandate, nor have they had for a long time, not with only about 1/3 of the votes cast.

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