- Will Hutton compares the alternative goals of either shrinking government to the point where it does nothing or harnessing it to meet everybody's basic needs, and explains why we should demand the latter:
A financial crisis has been allowed to morph into a crisis of public provision because the government of the day will not lift a finger to compensate for the haemorrhaging of the UK tax base. What the state does is not the subject of a collective decision with concerned weighing of options. Instead, it’s an afterthought, with the greater priorities a reduction in public borrowing and freezing or lowering tax rates.- Meanwhile, Bill Curry notes that the Harper Cons are matching their UK cousins by "balancing" a budget only based on unexplained and implausible assumptions which make it all too likely that we'll end up losing important public assets at fire-sale prices.
All the state can spend is what is left after those two greater priorities are met, and if it has to shrink to pre-modern levels then so be it. The market will provide: charity will alleviate suffering; people will get by; the roof will not fall in. Lifting taxation can never be considered to close the gap. It is, it is alleged, both economically self-defeating and immoral.
(T)here is never a weighing up of the benefits of raising taxes against a particular use for public spending, nor any strategic long-term programme of investment.
This is bad enough in ordinary times, but when a chancellor refuses to consider raising taxes as the tax base collapses it is a recipe for disaster. It results in a minimal state, with implications for prisons, schools, courts, policing, legal aid, care, security and defence that are profound. Some of this could be avoided if, as both Labour and the LibDems propose, capital investment was not lumped in with current spending so that virtuous borrowing could be separated out. The country may also get lucky: wages stop stagnating and income tax receipts rise.
But the bigger truth is that if Britain wants the scale of public activity congruent with a civilised society, it has to be paid for.
There is a different future, and our politicians of the centre and left have to argue for it, but they must accept it has to be paid for. This has become an existential divide. Politics and political argument have never mattered more.
- Linda Tirado offers her observations on the high cost of being poor. And Adam Walsh discusses the difficulties faced by the people left behind in boom times.
- Tony Burke writes about the need for both more fair taxation and stronger collective bargaining to ensure that workers benefit from economic gains.
- Finally, Michael Harris highlights the Cons' cynical attempt to cling to power by replacing any expectation of effective government with a non-stop spin cycle.