From our favourite retired accountant.
The government has announced the first round of cuts in government spending. At just over £6bn they represent just 0.8% of total forecast state spending this year, and by themselves are insignificant to the economy as a whole.
Any government could make savings of this amount as part of regular spending reviews on an ongoing basis and they would not be noticed.
How excellent, eh?
We could cut 0.8% of GDP from the government bill on a regular basis….every 6 months or so….and no one would even notice. It\’s easy! Hurrah!
So, all we need is a decade of that, we\’ll slice 16% off the burden and have fructifying going on in pockets everywhere. Finally, a suggestion from Ritchie that I can really get behind!
This is more of the usual though:
This belief in so called ‘supply side\’ economics has been discredited worldwide: there is no evidence it works.
The evidence being that when places like Sweden *, New Zealand, Canada and so on faced towering debt burdens and sluggish growth, exactly these sorts of supply side policies, market liberalisations, are exactly what dragged them out of the cacky.
But there\’s none so blind who will not see and all that…..
*The welfare system that had been growing rapidly since the 1970s couldn\’t be sustained with a falling GDP, lower employment and larger welfare payments. In 1994 the government budget deficit exceeded 15% of GDP. The response of the government was to cut spending and institute a multitude of reforms to improve Sweden\’s competitiveness.