British politics today is dominated by a lie. This lie is making it significantly more likely you will lose your job, your business, or your home. The lie gives a false explanation for how we came to be in this crisis, and prescribes a medicine that will worsen our disease. Yet it is hardly being challenged.

Here’s the lie. We are in a debt crisis. Our national debt is dangerously and historically high. We are being threatened by the international bond markets. The way out is to eradicate our deficit rapidly. Only that will restore “confidence”, and therefore economic growth. Every step of this program is false, and endangers you.

– Johann Hari: The biggest lie in British politics

Discuss

And? I thought everyone with any sense knew this

TandemJeremy – Member

And? I thought everyone with any sense knew this

Indeed, only the chronically stupid or criminally reckless would disagree

The guy is a hack rehashing other peoples’ arguments.

Agreed, everything Johann Hari says is fact.

Perhaps he is but it doesn’t affect the underlying facts…..

Does this guy know the difference between debt and deficit? I doubt it, he looks to be as credible an economist as the big poo I did earlier.

Gordon Brown will be damned by history for his role in deregulating the banks – the real cause of this crisis.

so it is Gordon’s fault then……

Either he missed out on Economics 101 or he has deliberately created a bullshit premise.

Why does this guy have any credibility?!

Does this guy know the difference between debt and deficit? I doubt it

He’s using the term ‘debt’ in the same way that the government is, is he not? His Twitter replies to people who’ve made the same point imply that he is aware of the difference.

that a pretty powerful, well reasoned and argued rebuttal there are you an academic djglover?

Seems to make sense to me.

I love the description of Krugman as a Nobel prize winning economist “whose predictions have consistently proved right through this crisis” – that neatly encapsulates the problem with all economic arguments: they’re based on pet theories, incomplete data, and wishful thinking. Krugman’s had a good run this time, there are so many economic experts out there that someone had to. For all this article may claim to be the truth it’s just another educated guess, which may or may not be true.

(And he’s wrong about Spain: the credit agencies are downrating Spain because of 20% unemployment and a collapsed property market, not because of the spending cuts.)

love his biog

Since he began work as a journalist, Johann has been attacked by the National Review, the Daily Telegraph, the Daily Mail, John Pilger, Daniel ‘007’ Craig, Peter Mandelson, Peter Oborne, Private Eye, the Socialist Worker, Cristina Odone, Jon Gaunt, the Spectator, Andrew Neil, Mark Steyn, the British National Party, Medialens, al Muhajaroun and Richard Littlejohn. ‘Prince’ Turki Al-Faisal, the Saudi Ambassador to Britain, has accused Johann of “waging a private jihad against the House of Saud”. (He’s right). Johann has been called ‘Maoist’ by Nick Cohen, ‘Horrible Hari’ by Niall Ferguson, “an uppity little queer” by Bruce Anderson, ‘a drug addict’ by George Galloway, “fat” by the Dalai Lama and “a c**t” by Busted.

Interesting selective use of Keynes. What does he say you should do on the up side of the cycle ?

What does he say you should do on the up side of the cycle ?

…surely that is irrelevant?

…surely that is irrelevant?

Not really, Hari neatly ignores the importance of timing: you can’t go on spending loads more than you earn indefinitely, at some point you have to reduce the difference. Whether the current government has jumped the gun or not is crucial to the debate.

mogrim – are you suggesting that we might be on the ‘up side of the cycle’ then?

The truth is that since the end of WW2 Britain has almost always been had a budgetary deficit. Even in the 50s when we “never had it so good”. There has only been four short periods since the of WW2 when Britain wasn’t in deficit. Three of them occurred under Labour governments. Only once since the end of WW2 has there been no deficit under a Tory government – despite the fact that the Tories have been power most of that time.

The truth is that the Tories have never worried about deficit before – even when they peaked under them.

The truth is that deficits are an automatic consequence of recessions, as the graph below shows, and the world has just experienced the worst global recession since the 1930s. If it didn’t feel like the worst global recession since the 1930s, then it is only because of the actions which the previous government took.

The truth is that countries which spend their way out of economic crises deal with their deficit quicker and better. Getting people back to work is the answer.

This is precisely what Argentina did when almost 10 years ago it was so much in debt (due to neo-liberal policies) that it was responsible for the largest sovereign debt default in history. They spent their way out of the crises.

For many years now Argentina has had one of the fastest growing economies in the world. Last year its economy grew by 9.2%, compare that with the shit we’re in.

Argentina’s primary budget surplus widened by 19 percent in February

Argentine President says, “It’s time to end the myth of the free market”

This government’s cuts have nothing to do with wanting to clear the deficit, and everything to do with a pathological and idealogical hatred of welfare provisions and public services.

The global crises caused by their mates the wealthy and powerful bankers, has given them a golden opportunity which they are determined not to miss. As things go wrong, which undoubtedly they will, they will blame everything on the last Labour government. But they will have achieved their aim, and those who matter will have remained very wealthy and privileged. They will almost certainly get away with it.

Sucker Britannia

Argentina also has inflation of 20-40%?

Argentina also has inflation of 20-40%?

About 25%. And ?

Are you going to trot out the Thatcherite bollox which says that inflation is the root of all evil ?

Or that unemployment is “a price worth paying” to reduce inflation, as Tory Chancellor Norman Lamont claimed ?

Nope (40% on food BTW). But without a heavily unionised workforce the populace would probably be suffering! 25% inflation would kinda suck if your salary wasn’t growing with it.

if your salary wasn’t growing with it

So you understand the solution then ?

(40% on food BTW)

Where do you get your figures from ? 13.1% and 10.6%

http://socyberty.com/economics/venezuela-bolivia-and-argentina-with-higher-inflation-rates/

It’s worth pointing out that when Argentina was gripped in a crises caused by failed neo-liberal policies (like those pursued by our Tory government) every week children were reported dying of starvation. That’s despite the fact that Argentina is one of the most fertile countries in the world, and is one of the world’s most significant exporters of food.

The present Argentine government’s policies has slashed poverty and unemployment. Who gives a **** if food prices are going up if you have a job ? Unemployment is a far greater evil than inflation. Wages will pay the food bill, no wages will pay for nothing. Inflation is a symptom of a highly active capitalist economy. That’s not to say that inflation shouldn’t be tackled though – just get your priorities right.

I’ll have to dig it out. It was an article from some Argentinian Economists that have been studying the price rises of a typical shopping basket of goods. It was sent to me by the finance dept of our Argentine office.

I’m not arguing with you ernie… but I do no for a fact that even those who are in the unions are getting salary increases less than current inflation rates and that the Argentinian Government is in cloud cuckoo land when it comes to forecasting inflation.

mogrim – are you suggesting that we might be on the ‘up side of the cycle’ then?

No idea, doubt anyone has tbh. But you can’t simply ignore the possibility just because you don’t agree with cutting public services.

Umm… I wasn’t ignoring it, just stating it’s irrelevant when we are clearly not on the ‘up side of the cycle’.
We are languishing at the bottom, periloulsy close to finding a whole new cliff to fall off… should we be cutting a vital source of economic stimulation?

Umm… I wasn’t ignoring it, just stating it’s irrelevant when we are clearly not on the ‘up side of the cycle’.
We are languishing at the bottom, periloulsy close to finding a whole new cliff to fall off… should we be cutting a vital source of economic stimulation?

Is the UK really “languishing at the bottom”? Is there definitive evidence, either way?

Whatever. I’m going to bed. I’ll reply in the morning! (Not running away, promise! 🙂 )

You need to give me a kiss before you go!

I’ll be back to talking rubbish on other threads by the time you wake up.

Government cam borrow.money cheaper than anyone else so why not? Inflation with house prices stupidly expensive as they ate now might be a good idea.

Yes I know how unreliable Argentine government inflation figures are. But inflation rates are a neo-liberal smokescreen. They are not anywhere near as important as they like to make out they are, jobs and growth are far more important……Thatcher was lying.

Just look at how low inflation was when the neo-liberals where last in power in Argentina :

Does that look good to you ? Well in 2002 Argentina was responsible for the largest sovereign debt default in history, unemployment was at 25%, and 57% of the population was living in poverty. The country was fecked. So much for the neo-liberals and their low inflation.

No idea, doubt anyone has tbh. But you can’t simply ignore the possibility just because you don’t agree with cutting public services.

Well if you have no idea of course you cannot ignore any possibility nor give weight to any probability. I doubt you will find an economist or politician who will claim that we are in anything other than a slump [z-11 probably thinks everything is ok] and therefore the downside of the cycle. In previous years there was more than now. GDP growth rate for example and even peak GDP though [ given inflation] that will be surpassed soon enough.

Is there definitive evidence, either way?

I am not sure …the last few years seem to be litterd with such succesful stories about the world economy, our economy, Euro Zone, Ireland , Greece etc it is really quite hard to work out whether this is the good times or the bad.
We could debate how bad and whether we are over the worst/making it worse/making it better but it seems foolish to discuss whetherr this is bad or not tbh. Dont the Tories say it is all labours fault are they trying to give them credit or blaimng them?

Sorry to p*ss on the bonfires of anyone who thinks they have evidence the current plan is a bad one. Or that Labour’s plan would be a good one. Who knows? And how can anyone claim they do ffs? This is unknown territory, we’ve not had this happen before: it’s global, all kinds of stuff is kicking off in the Middle East and Japan which will impact on confidence and price of oil and other key goods, US is facing a potential long term decline, BRIC countries are changing the balance of global power – all of which is unprecedented.
We can show as many graphs as we like ‘proving’ our own view but one-off case studies of some historic event don’t prove anything – they’re not comparing like for like – there’s nothing in history to compare our current situation.
It’s a bit like charging down a rocky descent you’ve never ridden before – you just get on with it as best you think, hold on tight, deal with it as it comes up and if you make it down ok, pretend you were under control all the way 🙂
Frankly no-one knows the best solution to this one. Politicians will claim their ideas are the best, of course they will, if they don’t act like they’re confident the people will panic…
Rant over and finger’s crossed…

And how can anyone claim they do ffs? This is unknown territory, we’ve not had this happen before: it’s global, all kinds of stuff is kicking off in the Middle East and Japan which will impact on confidence and price of oil and other key goods, US is facing a potential long term decline, BRIC countries are changing the balance of global power – all of which is unprecedented.

I don’t see how this is unprecedented. Looks like history repeating to me and as such lessons can be taken from such history to determine whether the economic plans of Governments are sh*t or not.

It’s a bit like charging down a rocky descent you’ve never ridden before

so presumably then line choice[plan] is irrelevant as is the skill of the rider [knowledge]or the quality of the bike [state of the economy] in predicting the likely success of getting down in one piece as none of us know what will happen?
Because something lacks certaintiy it does not mean that we cannot evaluate the benefits/risks and likely outcomes.

Close your eyes and grab a fistful of brake?

Interesting euphamism I bet you say that to all the girls

… and boys. Hell, I’m not racist.

That won’t make the cabbage fat.

Sorry to p*ss on the bonfires of anyone who thinks they have evidence the current plan is a bad one. Or that Labour’s plan would be a good one. Who knows? And how can anyone claim they do ffs?

Well the government certainly claims that their plan is the correct one, that’s why they insist there is no need for plan B……..plan A will work perfectly.

And as El-bent mentions, there are plenty of historical precedents. Whilst every situation might be unique and different, certain things never change, eg, recessions cause deficits.

And the whole justification of Vince (economist extraordinaire) Cable’s spectacular acrobatics, whereby he ditched all of the economic policies he stood for at the general election, was the events in Greece. He claims that Greece’s problems made him realise the importance of clearing the deficit immediately.

Obviously that’s all complete bollox, but it shows how economists are very keen to use historical examples to justify the conclusions they come to. Despite the fact that personal prejudices is always the deciding factor.