Last night in Britain (October 29, 2018), the British Chancellor released the – Budget 2018 – aka the 2018 fiscal statement (my terminology, to avoid triggering the flawed household budget analogy). The detailed analysis is being done by others and I haven’t had enough time to read all the documents produced by the Government and others yet anyway. But of the hundreds of pages of data and documentation I have been able to consult, the Government is trying to win back votes while not particularly changing its austerity bias. That is fairly clear once you dig a little into the outlook statement produced by the Office of Budget Responsibility (OBR). The Government’s strategy is also unsustainable because it continues the reliance on debt accumulation in the non-government sector, which will eventually hit a brick wall as the balance sheet of that sector becomes overly precarious. Nothing much has been learned from the GFC in that respect. The Government can only cut its debt by piling more onto the non-government sector. Second, the response of the Left has been pathetic. The Fabians, for example, has put out a document that uses all sorts of neoliberal frames and language, making it indistinguishable from something the mainstream macroeconomists would pump out – the anathema of the constructs and language that the Left should be using. There is a reason the political Left has fallen by the wayside over the last 3 or so decades. And their penchant to write and speak like neoliberals is part of the story....Bill Mitchell – billy blog
British fiscal statement – no end to austerity as the Left face plants
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
“The response of the Left has been pathetic. The Fabians, for example, have put out a document that uses all sorts of neoliberal frames and language, making it indistinguishable from something that mainstream macroeconomists would pump out. There is a reason the political Left has fallen by the wayside over the last 3 or so decades. And their penchant to write and speak like neoliberals is part of the story.” ~ Bill Mitchell
ReplyDeleteLeftist party leaders and right-wing party leaders are all neoliberals who work for the rich. Fabians in the UK [and Democrats in the USA] are now calling for a balanced federal budget, which is something that conservatives used to do.
Leftist leaders conceal their neoliberalism by encouraging the masses to bicker about political correctness and identity politics.
Right-wing leaders conceal their neoliberalism by encouraging the masses to bicker about “commies,” “liberals,” “terrorists,” the “immigrant threat,” and so on.
It’s all designed to distract public attention from the ever-widening gap between the rich and the rest. This distraction is effective. Trump opposes Universal Medicare, and is talking about cutting Social Security – and yet his fans worship him more than ever.
“The Government’s strategy is unsustainable because it continues the reliance on debt accumulation in the non-government sector, which will eventually hit a brick wall as the balance sheet of that sector becomes overly precarious.” ~ Bill Mitchell
Gratuitous austerity is designed to force the peasants to take more loans from private lenders, who create loan money out of thin air. Loan money (the principal) is slowly destroyed as loans are paid back. Banks make their profit from interest paid in addition to the principal. Interest payments suck money out of the economy, and reduce the masses to debt slaves. Eventually this slavery causes society to become crippled, which manifests as a major recession, or an outright collapse.
Some ancient societies (e.g. Babylon) prevented collapse via periodic debt jubilees. However, by the time of the ancient Romans, moneylenders became an incurable cancer.
“The Government can only cut its debt by piling more onto the non-government sector.” ~ Bill Mitchell
The federal government’s “debt” consists of deposits in central bank savings accounts. There is no need to reduce these deposits. And even if the government did have a need, the government could reduce deposits by selling fewer Treasury securities.
“Philip Hammond wants to ‘send a message loud and clear to the rest of the world: Britain is open for business’.” ~ Bill Mitchell
Meaning the British masses are ripe for financiers to come in and increase debt slavery.
“The rise in tax receipts did not mean the Chancellor had more money to spend.”
Correct. The UK government can create infinite money to spend.