The Oldest Trick in the Book
The Oldest Trick in the Book
Cut taxes. Cry Broke. Defund the public sector.
Now that we have seen the so-called “mini-budget,” there is plenty of speculation about what comes next. As a reminder, the Truss/Kwarteng budget, which was reportedly “fleshed out with senior aides over coffee and biscotti in Truss’s living room in the third week of August,” is a huge gamble on supply-side economics. And it’s only the beginning.
The next shoe to drop comes later in the year when the rest of the government’s fiscal plan is released. With the mini-budget roiling currency and bond markets, many observers expect Truss and Kwarteng to announce massive spending cuts to the public sector in order to “restore market confidence.” If you remember anything about the Reagan era and David Stockman’s playbook, then you know how this game is played: (1) push through massive tax cuts that disproportionately benefit the rich; (2) claim the tax cuts will “pay for” themselves through higher growth; (3) watch the debt and deficit soar; (4) clutch pearls; (5) demand cuts to public programs as the only alternative (TINA).
Already, some economists are asking whether the mini-budget should be viewed “a Trojan horse for a massive attack on the welfare state.” Such an attack would be politically unpopular. Unless, of course, it could be carried out under the cover of TINA. The economics editor at The Spectator, has speculated that the mini-budget will push the Bank of England to hike interest rates even more aggressively. If they do, she says it might be “a design feature, not a design flaw, of Truss’s plan.”
It might sound far-fetched, but as Professor Gabor of the University of West England, Bristol notes, “borrowing requirements would fall a lot if say, UK government [were to] announce a massive cut in NHS spending, education, no net zero, privatisation of strategic assets (NHS again) to contain pressures on sterling/gilts.”
PS Don’t miss the last paragraph in the article above. And then—if you can navigate the paywall—read this. You’d be forgiven for being tricked into believing every word.
Is the UK Labor Party so inept that it can’t mount a credible attack on these outdated and destructive Tory policies? Two weeks into her tenure and Liz Truss seems intent on proving herself a high-functioning monetary moron. Unlearned history is repeating itself in Truss’ Thatcher-era mistakes.
Currency markets as well as much of actual commodity markets are really nothing but manipulation and escape from change mechanisms utilized by Finance within the current monetary paradigm. In the new paradigm much of speculation would be severely regulated or even banned.
Do you want to: End inflation forever? Virtually eliminate payroll taxation, cut income taxes by at least 50% ? (but tax the shit out of anyone who cheats or games the new paradigm) Double everyone's purchasing power? Isolate Finance from the rest of the legitimate economic business models while exposing private money creation as the dominating and costly parasite it has always been? Integrate the self interests of traditionally opposed economic constituencies and agendas which would enable the kind of coalition needed to finally wake up, die right and herd the entirety of the political apparatus toward sanity?
Communicate the benefits of a 50% Discount/Rebate policy at retail sale to the masses as well as the rest of the new paradigm program.