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Why is Labour still using the self-defeating, discredited ‘maxed out credit card’ analogy?
(www.theguardian.com)
This is the best summary I could come up with:
Independently of whether the £28bn green investment programme was the right policy for the next Labour government to commit to, Rachel Reeves’s reasons for ditching it were an undeserved gift to the Tories and a partial vindication of their disgraceful flirtations with an austerian, anti-green political narrative.
If we owe George Osborne anything, it is irrefutable empirical evidence that using the analogy of a credit card for a nation’s budget (along with inane “belt tightening” and “fixing the roof when it is sunny” metaphors) is a terrible basis for prudent fiscal policy.
It is true that the Tories will leave scorched earth behind for the next government, with a budget dripping in red ink and a pitiful level of investment in the technologies and services the UK needs to escape a long-term slump.
By adopting the “maxed credit card” narrative, Reeves endorsed Osborne’s flawed logic and, indirectly, absolved the Tories for the wanton damage they have inflicted on a generation of Britons.
The difficulty that any British government faces today is that, since President Biden inaugurated his expansive green transition spending spree (improbably labelled the Inflation Reduction Act), the UK is caught up in a subsidy war between the US, China and, to some extent, Germany and France.
In this context, were it to be spent as planned (ie, as Inflation Reduction Act-like subsidies for private business), Labour’s £28bn would be a mere drop in the ocean, incapable of diverting the torrent of capital rushing into the US and China.
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