Friday 3 February 2017

Tory and LibDem lies about Labour wrecking the economy

Every BBC Question Time,  a Tory or LibDem politician comes on and talks about the terrible deficit inherited from Labour and 'Labour wrecked the economy'.  Here's the raw stat: 

2007-08 – £ 40.3 bn
2010-11 – £ 145.1 bn

That large hike was caused by the crash-and-bailout. 

(Economists can argue about: what is a 'sustainable deficit' in either gross figures or in figures in relation to the GDP. They can also argue about what this deficit means for a country that has a currency that is held by other countries (ie sterling). They can also argue over whether even that large deficit was 'sustainable'. They can also argue over what was the best way out of that higher deficit - austerity which lowers government income or spending on growth projects (a la Keynes). )

Ultimately, though the lie is that 'Labour caused the high deficit' and that Labour 'wrecked the economy'.
The crash-and-bail-out caused the higher deficit. 

If anyone on the Question Time panel who blames Labour for this, then it's down to them to say what they would have done instead of the bail-out. At the time no one was saying £40.3 bn pre-crash deficit was too high, and very few right-wingers were saying that the bail-out was wrong. 

So, the lie is sold over and over and over again.

(There is of course the question of what caused the crash in the first place! It wasn't 'Labour', it was an economy in which it's fine for people to sell debt to each other without that debt being related back to anything in the real world ie ('speculation'). So money was being 'invested' in projects that had no chance of producing returns. And people lent huge amounts of money to those doing this phoney investing. The worst thing that Labour did was not contest this. But of course neither did the Tories or LibDems. They all thought they could ride this and take the cream off the top. At the end of the day, though, politicians didn't cause the crash, the crash was capitalism doing its thing at a particular stage in a particular part of world capitalism.)