The war against the deficit is presented to us daily as something that must be done, that 'we' have to do. It rests on several assumptions:
1. There is a 'deficit' or what the technical folk call a 'structural deficit'.
2. If it isn't brought down, some kind of economic cataclysm will take place.
3. It's something that 'we' have to do (or it is done to all of 'us').
Let's take these one by one:
1. The more I read about this 'structural deficit' the less it seems to be something actual or real. So, I got to understand the difference (or so I thought) between the 'debt' and the 'deficit' was by comparing them to my mortgage and my bank balance. The 'debt' I thought was like my mortgage - permanent, background buzz of outgoings that I could do nothing about, just fixed and there as part of my penalty for wanting to live in a house that I tell myself I own. Historic and unmovable. The deficit was like my bank balance, going up and down according to my income and my spending.
It now seems that though my bank balance is a concrete fact, the deficit is what economists predict is going to happen if certain things are done by politicians. However, those who predict it are hardly ever right; the size of this deficit may or may not matter as that would depend on 'what comes next' i.e. is the exchequer able to pay off whatever it owed earlier as well as paying interest rates on what it owed as it went along. And again, what is clearly even less predictable than our own personal incomes in my bank balance analogy, is the amount of money the government 'earns' or gets from the taxes we pay, which, as we know, is dependent on how much money employers pay us.
Meanwhile, the main penalty that seems to occur if it is deemed that the structural deficit is too high is that the government has to borrow money at a higher rate. But isn't this all just a matter of bankers and bankers' economists talking to each other about what they predict will happen, rather than what is actually happening? Might it not be just a matter of kidology for some wider ulterior motive…like, for example…an ideological reason to 'cut the welfare state', or what Margaret Thatcher called eradicating socialism?
Even so, it now seems in retrospect that there is no difference between the kinds of running deficits that Tory and Labour governments have had. If anything, Tory running deficits have been higher…and even this one may well turn out to be so too…
This is not what we hear in the press. Nor do we hear the extent to which the 'deficit' as a present ongoing useful concept is bogus. No, we keep hearing e.g. BBC journalists talking about how 'we' have to bring the deficit down.
2. What is the cataclysm if 'we' don't bring it down? It seems, as I have said, that the cataclysm is the potential of bankers making government borrowing more expensive. However, at the same time, the policies in place seem just as capable of bringing about a cataclysm: huge private debt, inflating property prices, low tax returns off low wages…
We are asked to accept a policy of government cuts and wage cuts on the promise that this will avoid the cataclysm even as other policies are in place bringing it about anyway!
3. The big lie in the whole story is that 'austerity' and the present policies are for the benefit of all of us. This lie is told by talking about the health of the 'economy' and quoting numbers of jobs being 'provided'. What is in fact taking place is an ongoing shift of wealth from the poor to the rich. So, if we take the national cake of wealth, a chunk of it can be expressed in terms of 'capital' (that's assets, property, money that is used for lending) and the other that can be expressed in terms of income from earnings or 'wages'/''salaries'. If we look at those chunks of cake over the last 30 years, we can see that the capital chunk has got bigger and the income chunk has got smaller.
'Austerity' was a way of carrying this on, even though 'capital' had blown some of its 'money used for lending'. Austerity is a way of clawing what was blown (or an attempt to do so) back from wage-earners.
Put more starkly, it was and is a way for the rich to stay rich or get richer, while the poor stay poor or get poorer.
