Quote:
Originally Posted by Ignitionnet
What killed Labour was how thin and precarious the tax base was, not their spending so much.
That did grow counter-cyclically though, and for sure a bunch of it wasn't efficient.
The big crime was, rather than rebalancing the economy, splurging the City cash. Labour were really bad for industry and their spending plans hugely dependent on the banking sector. So when that went belly up....
Certainly the accusations that they were spending out of control are unfair. Likewise anyone saying that Labour weren't disastrous for the economy is being somewhat disingenuous. Labour's economic plans were geared for electoral gain and the difficult decisions were avoided.
Alongside that there was a big streak of, oddly, corporatism. The gold was sold at rock-bottom prices to prop up the financial sector.
Slower and more sustainable growth, both economically and in spending, would've been preferable. Hindsight is a wonderful thing.
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What has how allegedly precarious the tax base was, got to do with excessive spending via borrowing as early as 2001? It wasn't precarious back then was it? How many ten of billions are being paid out EACH YEAR in debt interest to pay for their pre-2008 splurge? That is money being removed from the economy and from sustainable public spending.
Borrowing around £40bn a year for several years BEFORE 2008, means that it was hardly a one-off surprise.
If somebody gets a big pay increase, works a lot of overtime and gets bonuses and STILL has to borrow to fund their lifestyle, they are not doing as well as they make out and should cut back on their spending.