Responsible Spending
I saw this staggering statistic about English public spending in the latest issue of Money Week.
If public spending had only grown in line with inflation since 1997, we could have abolished income tax, corporation tax, capital-gains tax and inheritance tax, leaving the taxpayer £200bn better off.
Governments have gotten very rich in the ten years of financial boom prior to the onset of the credit crunch. In the UK the Labour government has managed to spend it all and nothing was put aside for leaner times like um a global credit crunch.
I suspect people will look back on the UK governments fiscal looseness during the boom and wonder whether they were mad, drunk, on crack or all of the above.
September 30th, 2008 at 10:08 pm
Elected officials have the mindset of IT contractors. They know they won’t be there for long, so who cares about what happens when they’re gone?
Not to mention there’s no such thing as a bank or government that can “put money aside”. Everything has to be invested!
September 30th, 2008 at 10:46 pm
Hi Hubbers
Funny thing is that in NZ, from what I can gather, the Labour Government is being criticised by the National opposition for not cutting taxes, and instead for foolishly putting money aside, for things like superannuation savings, (Kiwisaver, Government Superannuation (aka Cullen) Fund). Instead, National propose to give people tax cuts, but at the same time fund their spending promises (albeit on infrastructure, (like Think Big?)) by borrowing, which is probably cost more given that the credit crunch.
(See http://www.nbr.co.nz/article/key-targeting-two-areas-pay-tax-cuts-33676)