Listening to some of our politicians and political commentators whittering on about the extent of the 'austerity' being visited upon this country by those nasty people in Government, one may easily be driven to believe that we're in the middle of a massive squeeze on our pockets. These same people constantly harp on about 'Plan A' having failed and telling us that it is now time for 'Plan B', whatever either of these plans is supposed to be.
That there is a degree of Government tightening of the fiscal controls is undeniable but at the same time they are pumping untold billions into the economy via the wholly unproven mechanism of 'quantitative easing', a euphemism for printing money. The actuial consequence of all of this is an increase in employment, not the sharp decline that would be expected in a traditional economic downturn, though take-home wages certainly have been squeezed. Nonetheless, we do not have the starving millions on the streets that we might expect if we really were being subjected to severe austerity measures, as they are in Greece, Spain and one or two other Eurozone countries.
Politicians and their acolytes inevitably talk in political terms and for them it's all about whether they are supporters of the Government or of the opposition. The nonsense about 'Plan A' and 'Plan B' seems to have been an invention of the socialists, as is the drivel about the appalling austerity we're being forced to endure. In truth, we're little more than 2 years in to the current administration's term of office following 13 years of increasing mismanagment by the other lot which brought us to the point of total economis collapse, and I'm not talking about the banking crisis.
The Labour Governments of 1997 to 2010 followed the usual socialist policy of borrowing and spending vast amounts on the basis that something would turn up to plug whatever financial holes were created; while Mr Micawber was hourly expecting that something would, indeed, turn up, he also knew that spending more than you earned was the path to ruin. Labour apparently did not read 'David Copperfield' or chose to ignore Micawber's sound advice.
What was left in 2010 was the biggest Government mess ever, compounded by the effects of the banking crisis; the banks did not cause the Government's mess, but the Government certainly had a hand in the creation of the banks' one through its lax financial policies and monitoring. This was, of course, all in the pursuit of some idyllic world in which we all becomne richer and richer while doing nothing of any tangible worth, a policy which was always going to end in tears.
Where we are now is at the sniffling stage. Those who had non-jobs in the public sector are the first to suffer and will soon be joined by those whose principle source of income is state benefits of one sort or another. Next will be those whose pay is simply not matched by their productivity or the value of the goods and services they produce, and their new cars, televisions, mobile 'phones and foreign holidays will have to go. By the time we get to this stage it will be all-out bawling our eyes out, but this stage is some way off yet. In other words, real austerity hasn't even begun.
Those who argue for a 'Plan B', meaning stop cutting government expenditure and start increasing it, are living in a fantasy land well beyond that of the cloud-dwelling cuckoos. For decades, we have paid ourselves too much for doing too little and the chickens are decidely coming home to roost; an economic correction had to come at some point and this is it. If we don't take the medicine now, but follow the socialist line of spending still more, the eventual pain will be a real live and full scale Depression which will teach us all the true meaning of 'austerity'.
Whatever the socialists are currently saying, they know full-well that more government spending will be disastrous; interest rates would soar along with inflation producing massive unemployment and a total loss of international credibility. We would be back to 1976 when dear old Denis Healey, another socialist, had to ask for help from the International Monetary Fund and had to accept stringent conditions as well.
Whether we like it or not, we're in for a lengthy period of economic retrenchment, not helped by the fact that most of the western world is in the same boat. The only good news is that we're not in the Euro.
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