Labour’s Cynical, Disingenuous National Debt Hysteria

Labour Party attack ad Tories national debt

Pot, meet kettle

You’ve probably already seen them countless times over the course of this general election campaign – the smug, sanctimonious internet memes bandied about by Labour supporters and other left-wing activists excoriating the Conservatives for having presided over a massive increase in the national debt since taking office in coalition back in 2010.

And of course this is factually correct. The only thing missing from these outraged little infographics is an admission of what would have happened to the budget deficit and national debt under fiscally incontinent left-wing economic policies – and the answer, of course, is that the situation would be even worse.

Yet even “serious” publications have been pushing the same disingenuous message, with Alison McGovern recently writing a piece for the New Statesman, demanding “The Tories used the budget deficit to attack Labour – so why haven’t they fixed it yet?”:

Spot the pattern? Tory Chancellors who loudly proclaim the virtues of having a budget surplus, have, in the end, presided only ever over deficits.

But it gets worse. The deficit, as the gap between money coming into the Treasury and money spent, has to be paid for by borrowing. And quite rightly, the Tories’ deficit target was matched by a debt goal. Borrowing to invest in structural improvements to our economy is clearly the right thing to do. But that is very different from permanent borrowing to prop up day-to-day spending.

Yet the Tories have delayed their target on debt three times since 2010

Their original target was to have debt falling by 2015-16. Then in 2014 that was delayed until 2016-17. Then in 2015 the target was to keep it falling every year until 2020-1. Then in 2016 that was changed to be “falling by 2020-1”.

This “goal” looks like one that will always be swerved as the Tory mismanagement rolls on.

Author’s emphasis in bold. McGovern concludes:

The budget deficit was used repeatedly by Osborne as an attack on Labour’s record in office.

This has now been demonstrated to be ludicrous chutzpah. Laughable, if it were not so serious. Ironic, if it were not to have such lasting consequences for all of us.

It’s time we moved on from a debate about the Labour past, and looked at what the Tories are doing today. We should show the leadership the country badly needs, and take this fight on.

Yes, how rude of the homeowner not to instantly repair all of the damage caused by the arsonist.

The bare-faced gall of these people is astonishing. Heading into the Great Recession, the Labour Party under Tony Blair and Gordon Brown consistently ran budget deficits, despite the fact that the economy was growing and boom and bust had apparently been “abolished”. And so when the downturn hit, there was almost zero room for fiscal manoeuvre by the government. Sure, we printed lots of money and nationalised failing banks – didn’t the Left used to angrily call that “privatising the profits and nationalising the losses?” – but we were in no position to undertake the kind of stimulus spending that America unleashed and which Keynesian economics dictates is the correct way to deal with a recession.

The budget deficit naturally exploded and reached a peak just as the Conservative / Liberal Democrat coalition government came into office, reaching a peak of around £160 billion when Labour left office. This means that the national debt was being added to every year at the fastest rate in modern history. To their partial credit, the Conservatives have succeeded in at least reducing the budget deficit every year (thereby slowing the rate of increase in the national debt) though they have consistently relaxed and missed their own targets for doing so, with the budget deficit now not due to be eliminated until the year 2026. And so we now have the spectacle of  smarmy left-wing internet meme-sharers lambasting the Tories for having failed to eliminate the deficit and significantly lower the national debt.

Well, what would they have had the Evil Tories do? The Left squealed like self-entitled pigs when George Osborne made even modest efforts to trim the deficit, repeatedly relaxing the timetable by which he planned to return Britain to a budget surplus. Are the Left now saying that they would rather have had deeper budget cuts? Abolishing the Army, perhaps? Surely not reducing funding for Our Blessed NHS (genuflect)? Or perhaps they secretly intended to eliminate the budget deficit by dramatically hiking income tax and national insurance on all tax bands, in angry defiance of the Laffer Curve? But what when this only suppressed economic activity even further?

Let’s be clear – the Conservative Party, under chancellors George Osborne and Philip Hammond, has been depressingly unambitious when it comes to eliminating the budget deficit. The party of David Cameron and Theresa May has not been the party of fiscal responsibility, and their constant lying about “fixing the roof while the sun is shining” and “paying down Britain’s debts” when in fact they have done no such thing only makes matters worse.

But the only thing more ludicrous than a Conservative Party which struts around pretending to be the guardians of fiscal responsibility is a Labour Party which ran budget deficits in the good years, leaving Britain particularly vulnerable to the loss of tax revenue accompanying a recession, attacking the Tories for having failed to enact measures which they would never have enacted themselves, and which in fact they repeatedly criticised the Tories for even attempting to do. It is simply mind-boggling that the Labour Party dares to attack the Tories on the question of deficit reduction and the national debt when their “anti-austerity” policies would have increased the deficit even further and made the national debt even larger.

Blogger Paul Goldsmith has had enough:

I actually can’t take it anymore. It is economically illiterate and it is self-defeating and it has to stop. It is like someone lighting a fire, which is an inferno when the fire brigade arrives, and then the person who starts it runs around replacing the brigade’s water with oil, and fanning the flames, whilst screaming at the fire bridgade that they can’t believe the fire isn’t out. Yes, Labour’s repeated taunts about the national debt really are that preposterous. Self-defeating too, as it brings attention back onto how the fire got started in the first place.

And then launches into this glorious tirade:

So, having left a deficit of £160bn, and a national debt (cumulative deficits added together), of just under a trillion, Labour have noted that the debt is bigger. Well, duh! Were the Tories supposed to have eliminated the deficit in their first year in Government? Impossible. In fact, what the Tories chose to do is to cut spending, added to a few tax rises, and slowly eliminated that deficit. Very slowly, slower than they originally hoped. But at every turn, every cut, Labour opposed them. Every single one. So yes, every year a lot of deficit (decreasing every time) got added to the national debt, but that is because Labour left such a massive deficit.

Now, yes, they left that deficit mostly because of the action they took to save the banking system and to try and stimulate the economy to stave off depression during the financial crisis. A financial crisis that wasn’t caused by Labour.

But look at the seven years between 2001 and the start of the crisis in 2008. Those were times of economic growth. During times of economic growth that deficit should have been a surplus (tax revenue greater than government spending). But it wasn’t, as Tony Blair and Gordon Brown chose to spend and maintained a deficit of around £40 billion a year. This means there was no financial room to manoeuvre when the inevitable recession came. Of course, Brown had boasted that he might have abolished boom and bust, so may not have been ready for that recession. But when it came, a huge amount of public money was thrown at it, which meant the Conservatives inherited a massive deficit.

Here’s my point, every time Labour mention the addition to the debt under the Conservatives, the Conservatives can just point to what they were left with. Best summed up by the note left by the last Labour Chief Secretary to the Treasury, Liam Byrne, to the first Coalition replacement, David Laws: “I’m afraid there is no money.”

It’s funny. Transport these same leftists to the United States, where beloved Barack Obama ruled from 2009 to 2017 in the aftermath of the same global recession, and they would doubtless shriek with outrage at similarly cynical efforts recently made by the Republican Party to pin the blame for American budget deficits and increasing national debt squarely on the Democrats. They would rightly point out that President Obama inherited a mess, an economy in freefall and public spending jacked up artificially high by his fiscally incontinent predecessor George W. Bush. They would correctly point out that nobody can work economic miracles like making a large structural budget deficit and cumulative national debt disappear in an instant.

But the sanctimonious meme-sharers do not live in America where an admired left-wing president ruled for the past eight years. They live in Britain, where the callous, heartless Evil Tor-ees (they’re lower than vermin, don’t you know!) have been in charge since 2010, and so all of the leeway and understanding that they would demand for themselves is stubbornly withheld from the other side under identical conditions.

As is so often the case, Labour Party propaganda relies on voter ignorance and lack of medium or even short-term memory in order to make an impact. With these lowbrow memes and the highbrow articles which underpin them, Labour Party activists and sympathetic commentators are counting on the British people being too stupid to ask what Labour would have done differently to have achieved a budget surplus and reduced national debt given the same circumstances faced by the Tories.

That’s certainly one way to go about trying to win an election, but there is nothing to be proud of in this tawdry, disingenuous approach.

 

Labour Conservatives National Debt - General Election 2017

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In Furious Denial Over The Failure Of Leftist Economic Policy, Owen Jones Misrepresents Conservatism

Owen Jones continues to use his Guardian column to peddle lies and misrepresentations about conservative economic policy, in a Herculean effort to save British leftists from having to come to terms with their failed economic policy dogma.

In praise of John McDonnell’s unabashedly left-wing conference speech, Jones whines:

It was a speech not lacking in concrete proposals: a tax transparency and enforcement programme; a £250bn investment programme in infrastructure and clean energy; a national investment bank, backed up by regional investment banks, to support small businesses; legislation to stop the emergence of Philip Greens by reforming companies – preventing them from “taking on excessive debt to pay out dividends” and ensuring company takeovers protect workers and pensions; the promotion of cooperative and worker ownership; protection for self-employed people; plans for a universal basic income and the reintroduction of collective bargaining to stop the levelling down of wages.

The critique writes itself: Labour lost the last election because it was not trusted with the nation’s finances. How on earth do these speeches address those concerns? There are two points to make. Firstly, Labour’s failure to defend Blair and Brown’s spending record – with the Tories revising history to claim that the investment they backed was at the root of Britain’s economic woes – is critical to understanding the party’s election loss. That’s why the Tories’ line – “why hand the keys back to the driver who crashed the car?” – was so devastatingly effectively.

My emphasis in bold.

Sorry, but this is complete balderdash from Owen Jones. The conservative / small government criticism of New Labour economic policy is not that runaway government spending *caused* the economic crisis – that is clearly false, when we know that the crisis was precipitated by a bad credit-fuelled housing bubble which undermined a grasping and improperly regulated banking sector. The conservative position is that by spending money like it was going out of fashion and running budget deficits even in the good years, there was absolutely no “rainy day” fund or financial buffer available when the bottom fell out of the economy and tax revenues dried up.

That is the real reason for today’s so-called “austerity” (meaning slightly reduced increases in government spending compared to earlier baselines). Jones later goes on to charge the Tories with “the failure to eliminate the deficit as promised, a rising national debt” – well, what would his preferred spendthrift policies have done? If Owen Jones is seriously suggesting that the forsaken economic recovery resulting from continued or increased government spending from 2010-15 was so great that it would have paid for itself, eliminated the deficit and taken a chunk out of the national debt then he is treating his readers like they are stupid. And he is holding the Tories to a standard of economic miracle-working which he would never expect of his own beloved Labour Party.

The reason that nobody trust the Labour Party on the economy – the reason that Labour MPs are laughed out of town whenever they even make a claim to economic competence – is that New Labour’s remorseless cranking up of the size of the state, together with their endless expansion of government spending and determination to hook more and more people on government welfare, meant that Britain was uniquely badly positioned among advanced nations to weather the global financial crisis.

The charge is not that idiotic PPI contract-delivered hospitals and shiny new school buildings in Britain actively caused a global credit crunch and recession. The charge is that this ignorant spendthriftery weakened Britain’s financial position, meant that the slightest cuts in government spending would immediately impact public sector workers or those encouraged to be dependent on various benefits, and made our subsequent economic pain that much more brutal – the cost of which can be counted today in lost and stunted lives. This is what Labour “compassion” hath wrought.

So no, the Tories do not suggest that electing a Labour government would be akin to “handing the keys back to the driver who crashed the car.” For all their faults, Labour did not deliberately crash the vehicle. But they did set out on treacherously icy roads having previously cut the brake cables, and that is just as bad, however desperately Owen Jones tries to spin it.

 

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Labour’s Economic Policy: The Slow-Motion Car Crash You Can’t Not Watch

John McDonnell - Labour Party - Jeremy Corbyn

Labour’s loose cannon Shadow Chancellor is behaving like an economically illiterate, childish simpleton with no clue how to oppose effectively, let alone one day govern the country

The past month has not been pretty for those of us who hoped that Jeremy Corbyn’s election as leader of the Labour Party might help usher in the return of serious ideological debate to British politics.

Jeremy Corbyn has scored just one significant victory so far: his first outing at Prime Minister’s Questions, where the opposition leader’s measured tone and clever decision to raise questions submitted by the general public succeeded in changing the tone of the session – and for the better.

But that one bright spot aside, it has been utterly miserable – unforced error following self-inflicted wound, compounded by acts of astonishing political naivety. On the rare days when the newspaper front pages have not carried stories about Labour Party splits and internal warfare, the newly energised Hard Left supporters have stolen the show with their venomous spitting, their rape threats and their incessant chants of “Tory Scum!”

And now Labour’s Shadow Chancellor, John McDonnell, has succeeded in undoing the parliamentary party’s only truly coherent and sensible position, for reasons which seem to change by the hour. In his infinite wisdom, John McDonnell decided to reverse Labour’s policy of following the Fiscal Charter – the commitment set by George Osborne to run a budget surplus during normal economic times – having announced it only two weeks ago at Labour Party conference.

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Our Long Term Economic Madness

George Osborne - Budget 2015 - Long Term Economic Plan - Fiscal Conservatism - Balanced Budget

 

By Ben Kelly, blogger and editor of The Sceptic Isle.

In May, the Conservative Party portrayed the election as a choice between Tory competence and Labour chaos; Labour’s spending and borrowing compared to the Conservative “long term economic plan”. The electorate made their choice and the current government received a mandate to cut the budget deficit and fix the economy.

Britain is now purportedly on the path to economic sanity, but you can be forgiven for having some moments of doubt. In the year 2015, after nearly six years of “austerity”, we will still spend £70 billion over budget. Should we redefine what the word “austerity” means?

The economic madness really began when Gordon Brown and Ed Balls implemented their plans for a high tax, high spend, much enlarged state with a continental-style economy. As we know only too well, it grew completely out of control.

The current government has the opportunity to reshape the British state permanently, and when ideas are floated about “thinking the unthinkable” and slashing budgets by 40% there is a flicker of hope that they might grasp it with both hands. Sadly, there is too much evidence to the contrary to believe anything serious is really being done to end the public spending spree and return to a sensible, sustainable fiscal situation.

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Labour’s 2015 General Election Manifesto Starts With A Lie, And Then Gets Worse

Labour Party General Election Manifesto 2015 - Budget Responsibility Lock - Debt and Deficit Confusion

 

Much has been made of the fact that the Labour Party’s 2015 general election manifesto begins with a so-called “Budget Responsibility Lock” to fully fund all spending commitments and reduce the deficit every year – locks and ‘triple locks’ currently being all the rage in British politics.

But Labour’s manifesto also begins with a blatant lie, and nobody seems to have called them out on it. So here it is, straight from the preamble to Ed Miliband’s pitch to the voters:

We will get national debt falling and a surplus on the current budget as soon as possible in the next parliament. This manifesto sets out that we will not compromise on this commitment.

No, this manifesto does nothing of the kind. In place of honesty, Labour’s manifesto actually tries to hoodwink the British people by conflating the current budget and eliminating the current budget deficit with the overall budget and eliminating the overall budget deficit.

Eliminating the current deficit is simply not the same as getting rid of the deficit altogether and restoring a budget surplus. The current deficit refers only to the gap between tax receipts and day-to-day government spending (i.e. excluding capital expenditure). Therefore, it is quite possible to run a current budget surplus while still running an overall budget deficit. And why does this matter? Because you can’t begin to pay down the national debt so long as there is any kind of budget deficit!

To deploy one of those awful but ubiquitous credit card analogies:

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