Two different recent stories which together show that we’ve really not much option other than cutting what the State does, cutting its activities and ambitions. For as far as we can see we’re at capacity in the economy, we’ve still got a deficit, the tax burden is at a peak - even using Keynesian economics this is a time to be fixing the roof while that Sun shines.
From today’s Telegraph:
Unemployment lowest since 1970s, but deficit edges up slightly
We also know that the employment to population ratio is at its highest since those ‘70s. There simply isn’t some reserve army of the unemployed, we’re using that resource in its entirety. Or at least, in what we usually think of as its entirety, we’re at full employment by any of the usual measures.
From the Times a little ago:
Britain is on track this year for the highest tax burden since 1969-70, at 34.6 per cent, according to forecasts released by the Office for Budget Responsibility alongside last month’s budget.
The State is abstracting from the economy, for its own desires, more of everything than it has done for many a decade. Increased taxation isn’t really an option therefore. And yet we’re still running that deficit.
There’re no unused labour resources lying around unproductive, what does happen is being taxed at high historical levels, we’re in deficit - yes, the only solution to this is a reduction in that Sate, in its appetite for our money to gorge upon.
A Keynesian might say the justification is to provide that fiscal room for government to increase spending again come the next recession. People like us might say that cutting spending’s just a good and useful thing to be doing whenever. But we are getting to the same answer anyway we do our analysis.
That no one in politics is talking or thinking this way just goes to show the truth of that old adage, the more united economists are on a point the less attention everyone pays to them.