Downward Spiral, UK - Our economy goes down the plughole, while the government starves it with ideologically driven cuts

Posted by Alexander Hay

'Storm-battered' may be an over-used cliche, but that doesn't stop it being an appropriate metaphor for the UK right now

The UK economy, yesterdayTake our debt. Now £1 trillion, (or two thirds of our GDP), it looms large over our economy. Will we lose our AAA rating? Will we ever recover? Can we keep borrowing?

All of which may sound like pertinent questions, but are in fact distractions from the main problem. After all, the debt is there whether we like it or not, but we do have a choice in how we deal with it.

After all, if you're going to get to grips with debt, there are two ways to progress. Cutting your spending may seem to be the most obvious choice, but it doesn't take into account the fact that you get what you pay for.

By way of analogy, I may be crippled with debt and so choose to live in a garden shed, all the while living only on cabbage and puddlewater. In so doing, I will be able to start paying off my debt but in the process, I will wreck havoc on my health as a combination of malnutrition and living in a cold, wet, unheated wooden shack take its toll.

Should I die or be hospitalised, I would then not be able to earn enough money to pay off my debt, making the whole exercise moot, or I could just die of exposure, which is certainly an effective way of avoiding one's creditors.

It would be far more effective to find out how I can manage my debt more efficiently while trying to maintain a half decent standard of living. Debt counsellors make their living precisely by doing this, advising debtors how to convince the baying pack of lenders to hold off while they pay off the amount in a more sustainable fashion. True, they might not get their money when and as they want it, but the upside is that they will get it all back eventually, plus interest, and no one dies of hypothermia in a shed.

Can you guess which approach the government has chosen? As befits someone who's never had to live in a council semi, let alone a wooden edifice with only Haynes car manuals and woodlice for company, George Osbourne has opted for austerity, which is a gradual progression down to the shed, via a bedsit and a diet of stale crisps and pot noodles.

The damage to the body politic, needless to say, is and will be considerable, though the full impact of the cuts has yet to be felt and so the electorate find the idea of public services being cut to be a jolly good idea, still labouring under the misconception that it will always be someone else who'll end up living in a shed.

After all, when the only benefit claimaints you see in the media are scroungers, dirtbags and swan-eating gypsies, it's easy to think you've got nothing in common with them, when in fact all that separates you is a regular paycheck and a company that's not had to lay anyone off. Yet.

The other problem is that public spending makes its way back into the economy through purchases, salaries, utility bills and so on. Cut that off in the wrong way and the economy suffers - indeed, it has already begun to suffer in areas of the country which rely on the public sector for employment.

To say that the public sector is unproductive, then, is an over-simiplification of the kind only tabloids and politicians could fall for. The Coalition government is simply using the present downturn to wage war on the public sector for ideological reasons, all rooted in that strange combination of class war spite and pollyanna blue sky thinking that passes for mainstream politics these days.

Needless to say this has not gone to plan - our economy shrank by 0.2% in the last quarter, and official unemployment is now almost 2.7 million, up from 1.71 million six years ago. And yet the government still insists on making cuts...

Or at least the cuts they feel happy to make, as no expense is spared on bloated monopolies such as the Ministry of Defence, military adventures abroad and white elephant infrastructure programs agreed upon even as the rest of our roads and rail system casually fall apart.

Imagine, if you will, living in a shed and eating caviar and you've cracked the secret behind the coalition government's economic policies, both destructively parsimonious and ruinously profligate in equal measure.

But still, what else could possibly go wrong? Like Greece defaulting on its debts, for example. Or China's bubble finally bursting. The Euro's ongoing turbulence is another worry. But let's not concern ourselves! We're not the type to end up living in a shed - we're far too responsible for that!

Or not, as the case may be.

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Alexander Hay

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