Wednesday, 1 October 2014

"We've cut the deficit by a third" - the worst boast in politics


"We've cut the deficit by a third" has been the endlessly repeated mantra of the Tory party for the last couple of years. This is a quite extraordinary boast to anyone who knows what the deficit is, and is capable of remembering what the Tories were saying about the deficit when they were enabled into power by the Liberal Democrats back in 2010.

Debts and deficits
[Main article]

The first thing to note is the way that several of the Tories who endlessly repeat this mantra of 
"we've cut the deficit by a third"  seem to be economically illiterate, or outright lying in the hope that the public confuse the meanings of the words deficit and debt.

In 2013 David Cameron lied that the Tories are "paying down Britain's debts" in a party political broadcast, presumably hoping that the public could be hoodwinked into believing that borrowing a few billion less per year than their predecessors were at the very peak of the global financial sector insolvency crisis is exactly the same as actually reducing the debt.

The Tory economic spokeswoman Claire Perry even went as far as claiming that the debt and the deficit "are the same thing" in a BBC radio interview! No wonder the economy crashed and has suffered 0% growth for seven long years if Tory economic spokespeople who used to work in the financial sector are so economically illiterate that they don't know the difference between a debt and a deficit.

What the Tories were promising back in 2010

Here's a direct quote from George Osborne's incredibly hubristic budget statement in June 2010, where he claimed that as a result of his ideological austerity experiment the budget deficit would be completely eliminated by 2014-15, and that by now the budget would be in surplus and the national debt would be falling.

"[The] deficit will then be eliminated to plus 0.3 per cent in 2014-15 and plus 0.8 per cent in 2015-16. In other words, it will be in surplus. Public sector net debt as a share of GDP will be 62 per cent this year, before peaking at 70 per cent in 2013-14. Because of our action today, it then begins to fall, to 69 per cent in 2014-15" [source]
A look at the reality shows us that the deficit is still absolutely enormous. Instead of reducing net borrowing to zero as he promised, he's still borrowing almost as much as Labour were at the very peak of the economic crisis. By the end of 2014-15 Osborne will have borrowed over £207 billion more than he said he would, and the economy will be over £127 billion per year smaller than he claimed it would be. In fact George Osborne has already created more debt in four years than all of the Labour governments in history combined!

Instead of the national debt falling to 69% of GDP this year, George Osborne's 2014 budget statement admitted that it would rise to 77.3% of GDP and wouldn't start coming down until 2018-19. It's hard not to notice that in 2010 he claimed that it would take four years to eliminate the deficit, yet four years later he's still claiming that it will take four years to eliminate the budget deficit!

Upon realising how spectacularly inaccurate his predictions have proven to be, it's hard to understand how the public aren't completely furious about this abject incompetence.

Eventually it's possible to understand how the public have been duped into trusting this over-privileged towel folder by looking at the way the mainstream media reports his failures. Instead of holding him to account by comparing his latest increased borrowing figures and downgraded economic growth figures with what he originally claimed, the media compares them with his previous set of
 increased borrowing figures and downgraded economic growth figures, meaning that his failures are dished out incrementally, rather than being held up against his ridiculously hubristic promises in 2010 that he would have eradicated the entire budget deficit by now.

Excuses, Excuses

The excuses for the failure of Osborne's ideological austerity experiment have been as laughable as the "wrong kind of snow" and "wrong kind of leaves" excuses used by rail operators to excuse disruption to train services.

In 2012 when Osborne had managed to turn a recovering economy back to negative economic growth, the Tories even tried to blame the results of their economic mismanagement on stuff like the Royal Wedding and the Queen's Diamond Jubilee, but the most feeble excuse of all has been to blame the Eurozone Crisis for the failure of "Osbornomics". The reason that the Eurozone has been suffering poor economic growth is exactly the same as the reason Osbornomics has failed; imposition of ideological austerity on economies like Spain, Portugal and Greece that desperately needed investment in the productive economy and financial sector restructuring instead.  

Conclusion

When you've promised to cut something by 100% by a certain point, endlessly bragging that you've cut it by significantly less than half is an absolutely ridiculous tactic. The only possible explanation for this idiocy is that whoever writes up these ridiculous political soundbytes for the Tory party to repeat is so out-of-touch and contemptuous of the public that they imagine that people don't know what the deficit actually is, and that they don't have the capacity to even remember what the very same people were saying about it just four years ago.


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