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Labour were elected to restore public services, I don’t think we’re looking at another round of Osborne-style austerity.
You're absolutely right. Austerity was the deliberate shrinking of the state and public services for (right wing, individualist) ideological reasons.
The lie was that this was necessary for reasons of financial prudence.
It's been depressing to see some on the left amplify this lie - that financial prudence and the slashing of public investment are indistinguishable - when in fact they're diametrically opposed.
Genuine financial prudence, for Cameron, at a time of historically low interest rates, would've meant fixing the roof while the sun shined, investing in the NHS, our energy infrastructure and insulation, public services, etc. That way we might've been prepared for Covid, cost of living, and the energy crisis.
This option isn't open to Labour. They're having to fix the roof while the rain is pouring in, and while the markets are still jittery as fuck about borrowing post Truss. I don't necessarily think Reeves has drawn up her response to these constraints perfectly, but imo it's dishonest to to pretend those constraints don't exist, or pretend it's reasonable for a government to simply ignore them (again, especially post Truss).
Genuine economic constraints are not 'austerity', and repeating the lie that they're the same thing just lets the Tories off the hook.
ReekBlefs-
financial prudence and public investment are indistinguishable
I'm sure I was listening to someone say there is a push from some quarters to start using net deficit(?) as a marker for precisely this reason. Ie where you factor the investment element into the calculation.
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It's not really the left's problem that this meaning of fiscal prudence exists — there's an entire section of the 'prudence' wiki page that talks about the economic definition, and while it's a little arcane in defining it as the third derivative of a utility function over consumption being above zero (accelerating utility/consumption), ultimately the framing is all about precautionary saving.
They're having to fix the roof while the rain is pouring in, and while the markets are still jittery as fuck about borrowing post Truss. I don't necessarily think Reeves has drawn up her response to these constraints perfectly, but imo it's dishonest to to pretend those constraints don't exist, or pretend it's reasonable for a government to simply ignore them.
I've said on this thread before that we've all seemed to learn the wrong lesson from Truss, just because it's a useful political framing to bash the Tories.
Labour absolutely have options other than market doctrine. The currency markets aren't stupid and very well understand that borrowing for investment, rather than tax cuts, is a positive and disinflationary way to grow an economy. That's not to say that there aren't real constraints, there are, but mostly it's to do with being at full employment, alongside problems with the distribution and type of labour, not debt.
Interest rates are not that high, and are basically at historical average. If the government are not able to invest at average historical interest rates then we've got much larger problems.
hugo7
slippers
Same, and I’d guess at least some of those measures, along with a reduction on higher rate tax relief on pension contributions, are on their way in the budget since they aren’t amongst the specific tax raises that were ruled out before the election.
Some spending has been cut, but so far it’s been things like departmental reductions in use of consultants, the social care cap (which protected pensioners’ wealth) and some Tory infrastructure pet projects. Can’t get too worked up about that, tbh.
Labour were elected to restore public services, I don’t think we’re looking at another round of Osborne-style austerity.