What is Austerity?

Austerity is an illusion. Countries carry high levels of national debt. A country’s economy is a complex beast, it bears little resemblance to a household budget. It is locked into a completely different relationship of power, of debt, and of income.

Austerity is an ideological attack on the poor. The logical countermeasures to deal with a debt in an emergency are to slash a huge budgetary commitment, or to increase the highest gaining tax to get more.

The illogical way is the way that the Tories have adopted is to try to adopt a systemic change for the most widespread low-yield gains. If you can get one hit of a million by taxing one man, or a million hits of one pound by hitting a million people, the Tories will do the latter.

But if we are talking a billion, we are avoiding taxing a thousand millionaires in order to try to hit one million poor people for ten pounds each. And so it escalates.

This is not economics. It is systemic ideological abuse of the poor.

Not only this, but in simple economic terms if a million poor people spend a tenner it will be in their locality, their own town, their own local economy, and it will boost profits, employment and opportunity in that area.

If a thousand millionaires spend a million it is likely to be overseas, on high value goods that Britain does not manufacture. Even if we import them, it is a much reduced fraction that goes to jobs in the UK and thus the local economy.

The net gain may be equal, but the net drain is massively disproportionate. This is expecially true if you consider geographic considerations – these thousand millionaires would be mostly in London, then in other big cities. Taxing them would be a tiny tiny percentage of the economic life of London, a minute fraction of other big cities, not least because as I said the majority throughput on their expenditure would go overseas.

Compare this to the million poor people. If a thousand of them live in one small town, and the government takes a tenner away from each of them, then you have reduced that town’s revenues by ten thousand pounds. Almost all their income was being spent locally, so the net loss is local. Local businesses with diminished takings, local employment stagnating or reduced, local opportunities diminished.

A singularly ideological choice. To destroy local economies where people do not vote Tory rather than to tax one thousandth of the number of rich people who donate money to the Tories. This is not just an ideological attack on the poor. This is corruption at the highest possible level. Punish the poor to spare the rich donor.

It is not just unjust and self-serving, it is not just economically insane, but it is morally evil and it is something that all opposition parties have an absolute moral obligation to stand up against.

 

Winds of Change
17th June 2015