Monday, February 16, 2009

Tax and spend? No, just tax and waste

The CBI, amongst others, is warning that taxes are going to have to rise to plug the yawning chasm that has opened up in government finances.

The CBI is predicting a further severe deterioration in public finances amid a deep recession in which the UK economy will shrink by 3.3pc and unemployment will pass 3 million.

To be honest, I've not read the CBI report, but if they are saying that that will be the end of it they are wrong. My bet is that is their prediction for the next 12 months - and I think the UK economy will continue to shrink and unemployment continue to rise long after that.

The Treasury will have to borrow £88.7bn this year followed by £148.7bn in 2009/10 and £168.1bn the following year, it claims. That final figure is the equivalent of nearly 12 per cent of gross domestic product, a figure without precedent in recent economic history.

The belief, from the CBI and others, is that the government will have to raise taxes substantially to try and make up some of the shortfall - and that, of course, will stifle any possibility of recovery.

"It means that every time the government sees a green shoot it will have to stamp on it by raising taxes to get the debt burden down," Sir Howard told The Daily Telegraph.

The question for me is why does everyone assume that the only alternative is to put up taxes? Don't get me wrong, I know that is what this government will do if they stay around long enough to have any future influence - and I know that is what Dave's Tory party will do if they get into power (but at least they can say it's all Labour's fault) - but nobody, absolutely nobody appears to think there is any alternative to solving the discrepancy between what our government spends and what they earn other than taxation.

Why don't they consider something really radical - like cutting what they spend? Let's stop kidding ourselves that all public spending goes on front line "essential" services - it doesn't.
Apart from the first duty of the government - to defend the nation, its people and interests from foreign threat, attack or invasion - all we want are decent schools for our kids, decent health care when we're ill, protection for our lives, property and livelihoods, clean streets which are safe to walk on and our rubbish collected once a week from our homes.

That's all we want from government, but despite the countless billions they spend, we don't even get that - the bare minimum. Why? Because the vast majority of public spending is wasted on liberal progressive pet projects which the vast majority neither want, use or benefit from in any way shape of form.

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