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Monday, 13 September 2010

Evans the stooge

It would be easy to label Evan Davies as another left wing stooge at the BBC, and he tries to sound as though he understands economics but his current analysis of the deficit leaves us in no doubt where he marks his ballot card.

His main premise is that as a nation becomes richer it chooses to spend an increasing proportion of its income on public services. This seems barely credible. Most people see the state as a provider of basic services such as education, law and order and healthcare. Sure ennough they might think that if their income doubles they can afford to spend more on education and healthcare, but on prisons, regulation and general bureaucracy? Of course not.

On the other hand there are plenty of politicians who are willing to tax an increasingly wealthy state in order to pay the cash back to some of the voters as welfare benefits and claim credit for doing so. Which is why we hear Evans' comment:

"By accident or design, it [UK welfare payments] has grown from 12% of national income in the early 1980s, to 14% when John Major's government left office to almost 16% now. " And that is not including the disguised welfare from negative taxation due to tax credits.

So in Evans' mind the whole reason for the deficit is that as the country prospered we all wanted more public services. Not so, because the simple fact is that the UK private sector really stopped growing around 2003, and much of the false sense of prosperity was created by incessant government expenditure funded by borrowings.

The private sector was wary of ever increasing overheads and stopped investing in the UK many years ago. To compensate, Brown pumped money into the economy with higher public sector salaries and PFI projects. "Oh look", he would exclaim, "GDP is up so we are all better off. I am sure we would therefore all like more public services" and so he would borrow some more to pay for it.

And it continued until the money ran out. Now we have to endure the unions saying the same thing almost as an echo. Cuts will hurt the most vulnerable. You mean those people who are being paid 16% of GDP for free gratis and nada. 16% of a supposedly (but not actually) growing economy. Well in a sense they are vulnerable because they have a lot to lose, but experience from only a few years ago tells us that even 1990 living standards were quite tolerable and that is probably where we will all end up due to the last government.

2 comments:

John Ward said...

I've only just stumbled onto this site, but it's a cracker.
Higher up the Beeboid food chain from Evans, Sir Michael Lyons has finally been hounded out by the donkeys....
http://nbyslog.blogspot.com/2010/09/bbc-lyons-led-by-donkeys-to-guillotine.html

Alex said...

Thank you for you comments. All comments gratefully received and arguments are quite welcome.