Have the left got it wrong?

[DrNorm]

The left criticise the right for "austerity", for reducing the budget deficit with the intention of working towards budget surplus and bringing down the national debt.

 

Will Hutton in The Observer comments that [reducing the national debt] "is an obsession motivated by ideological animus against public services and public provision."

 

He also says "Britain's national debt is comfortably affordable today - even moderate by historical standards. To present it as economic enemy number one is just wrong."

 

I'm on the left politically, but isn't this short term thinking?

 

The more we spend, the more it gives us the illusion we are rich in the short run. However, the act of spending more than we earn will impoverish and therefore disempower us.

 

Surely socialists want a powerful state that doesn't answer to the capitalists?

 

Who wants the state to be in debt to the money lenders?

[Mecky]

But Labour did not double the national debt since 2010. How does borrowing more reduce the deficit? labour have only twice left office with a higher national debt, as a percentage of GDP, than which they inherited. Both of these occasions were after the two worse global economical callapses ever

Edited March 30, 2015 by Mecky

[DrNorm]

The point is how comfortable the left seems to be with debt now. I refer to Will Huttons comments and similar . A powerful state is not one thats heavily in debt. Sure we want to preserve services, but not at the expense of weakening the state.

[I1L2T3]

If its all about fiscal prudence then all the main parties have it wrong.

 

Labour tends to do things that become visible in the national government finances except (ahem) when they kick the can down the road and use PFI. The Tories try to make it look like they are trying to balance the books but do things that manifest in the economy later, for example regional imbalances and underinvestment in infrastructure. Both kick the can down the road and both are economically damaging.

 

No side gets it correct. It's like a pendulum swinging every few parliaments between different ways to damage our economy even more and each side has a favoured way of doing it. But back to the original question, yes the government has to be seen to be prudent. Not seen any evidence of it though in the UK during my adult lifetime.

[carosio]

Surely socialists want a powerful state that doesn't answer to the capitalists?

 

Who wants the state to be in debt to the money lenders?

 

A good proportion of the "money lenders" are the general public and pension funds, or anyone who might have purchased UK gilts.

[Minimo]

Are there any countries that don't carry a national debt?

[tlangdon12]

A powerful state is not one thats heavily in debt. Sure we want to preserve services, but not at the expense of weakening the state.

 

I agree with this completely. A state that is in control of its finances needs to borrow very sparingly. The national debt was out of control - I believe the Left did lose sight of the fact that someone has to repay the debt at sometime, and over borrowed to achieve laudable aims. I think slower progress would have been better.

 

So the Conservatives are right to focus on repaying some of the debt, but I think they do have the ideological fear of public services and public provision that the Guardian proposes. The current Conservative leadership are excessively driven by this fear, which leads to act against the interests of the population as whole and for the interests of the elite.

[tzijlstra]

Are there any countries that don't carry a national debt?

 

That depends a bit on your definition, there certainly are countries that have hardly any national debt.

 

With regards to the OP, have a look at this list and see for yourself.

 

By no means do I claim this is the most accurate and scientifically correct list in the world. But the Top 20 makes for revealing reading. The number behind the country name is the percentage of debt compared to GDP.

 

Number 1 is Japan, a country in severe economic crisis and unable to get itself out of it, has been stagnant for so long now that it has dropped down the rich-list. Number 2 is Zimbabwe, a country so poorly run that the only way it could keep its national debt under control is by introducing hyper inflation. 3 is Greece, we all know about Greece. 5 is Iceland, again a country we all know about although it seems to be recovering. 4,6,7,17,18 are EU countries under big pressure, Italy, Portugal, Spain (From the infamous PIGS acronym) and now also France and Belgium - France's debt was allowed to increase under Hollande, Belgium is suffering due to years of non-government. And then there is the UK in 20th. If nothing had been done to curtail spending Britain would be projected to be in the top 10 with debt well over 110% of GDP.

 

Compared to the majority of the countries above us, the UK has done alright in terms of avoiding massive budget cuts and really painful decisions, but it goes to show that there is a very small gap between where we are now and economic meltdown.

[jfish1936]

Lord Macauley, in his "History of Britain" (free, from Project Gutenberg) , praises National Debt, and describes Britain's prosperity rising eith the level of that debt.

But in his day, it was money deposited in the Bank of England, mainly by British wealthy; now it's money from all over the world. That makes a difference!

[DrNorm]

Thanks for all the comments which not surprisingly highlight the fact that the politicians play games with the issue for their own ends rather than for the long term benefit of the country:

If its all about fiscal prudence then all the main parties have it wrong.

 

Wouldn't it be great if we had leaders who could see beyond the numbers in the short term? I'd be happier voting as I do if I was confident that the politicians were thinking beyond their term in office.