Thursday 17 September 2009

Both parties will cut - Neither should.

The Tories have embarked on another set of contradictions, criticising Gordon Brown for preparing to cut public spending, when it’s obvious that Cameron’s conservatives will cut, as they continue to delay on committing to what their public spending policies actually will be for the next election. In their economic policy section they continue to talk about tax cuts. In the middle of a recession the plan must be that these tax cuts will encourage people to start spending and borrowing again. Brilliant news, this economy of debt has collapsed, so lets re-inflate the debt bubble again in what they call “Real economic change.”

I’m no expert on economics but these tax cuts will leave an even bigger hole in the public finances and force the public spending cuts that Cameron seems to hate so much.

Any economist would tell you not to cut during a recession and Adam Lent at Liberal Conspiracy explains it a lot better than I ever could, stating that “Spending reductions cause job losses in the public sector and job losses and financial problems in the private sector (as the state’s procurement of services and products from private companies is reduced). This increases the bill to the state for unemployment benefit and also for increased spending on health, social and police services – the demand for which always rises during periods of higher unemployment.”

Spot on, neither party should be looking at wholesale cuts, Labour might be, but the Tories probably are. Which one would you want in government?

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