Friday, September 26, 2014

Forgotten Posts from 2009 : Brown and Darling show what's wrong with democracy

Labour was been in power in the UK for 12 years. For most of that time, the UK economy has grown steadily, to the envy of some its poorer performing continental neighbours. During that time the public sector proportion of GDP has gone from 38.8% to 42%. Almost without exception every year there has been a budget deficit. As Chancellor of the Exchequer and subsequently Prime Minister, health spending has gone up by 66% as a percentage of GDP, doubling in real terms, yet the outcomes are barely an improvement. The economy of some parts of the UK, such as Scotland, is more dependent on the state sector than Hungary was in the latter days of communism.

So the last act, having ridden on a wave of asset price inflation, encouraging massive credit bubbles and then seeing them pop, has been to spend - spend - spend.  To ignore the collapse in tax revenue and the budget deficits since 2001, and to leave a legacy of overspending that the next government will have to face, and then be criticised for being "cruel" because inevitably it will cut spending on welfare, local government and other areas of social spending.

People vote time and time again for governments that spend money borrowed from future voters, and then when confronted with the true costs of those decisions, they will bite back.  What chance the next Conservative government will be a one term government because Labour's client welfare recipients and public servants will bite back.

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