The media’s attempt to batter the public into a state of economic illiteracy has been ramped up by the Daily Mail’s attempt to conflate bank bail-outs with the government deficit.
The media’s attempt to batter the public into a state of economic illiteracy and turn the mantra ‘strength through cuts’ into a national obsession was ramped up on Friday when the Daily Mail attempted to conflate bank bail-outs with the government deficit in order to strengthen its case for public spending cuts.
According to the Mail, UK national debt stands not at 58 per cent but at a full 240 per cent. The newspaper takes its cues from a recent Centre for Policy Studies report (pdf) in arguing that the true level of UK national debt is four times original estimates when taking into account the debts owed by those banks bailed out by UK taxpayers.
The figure of 240 per cent also includes government pension liabilities even though these are future costs, not costs that are being paid now. The ‘240’ figure prompted Tory MP, Brooks Newmark, one of the report’s authors, to state:
“It is clear that the extent of UK indebtedness is such that the coalition must be relentless in its efforts to cut the deficit as quickly as possible.”
We are being told that our part-ownership of profit-making banks reinforces the need to make hundreds of thousands of people redundant so as to address the deficit. I am at a loss, which is more than can be said for RBS which last year made an operating profit of £3.5 billion.
The coalition and its supporters in the media will seemingly stop at nothing, stoop to any level and use any argument, however tenuous, in order to persuade the public that ripping up public services and laying off public servants is necessary.
The bank bail-outs contribute to national debt, not the deficit. Cutting investment in Education Maintenance Allowance and other programmes may bring the deficit down but it will also create the sort of low growth which makes paying off the national debt a thankless, if not impossible, task. The national debt will only be tackled by fostering a sustained period of strong economic growth through investment in skills, education, transport and infrastructure, research, innovation and enterprise.
Addressing a private sector-induced deficit by putting in place the sorts of public sector cuts which damage the ability of the private sector to grow precisely at a time when the private sector is weak and bank lending is low may help boost short-term corporate profits but it won’t help cut national debt.
Labour must do more to counter the scaremongering that we are seeing in public debate about the size of UK national debt and challenge the media-established economic orthodoxy that the budget deficit is the product of public sector over-spending and can only be addressed through cuts. A low-growth economy is not in anyone’s interest.
26 Responses to “Daily Mail heaps bank debt on nation’s shoulders”
Mark Stevo
Sorry Mr S., I may have confused you with someone else.
Daniel Pitt
Daily Mail heaps bank debt on nation’s shoulders: http://bit.ly/g6Bqbr #DailyFail #ConDemNation
Clive
WHEN WILL YOU SHEEPEOPLE GET THE BLOODY MESSAGE!
We’re dammed if we do, and we’re dammed if we don’t – anyone who tells you is either a politicians canvassing for votes – or a fantasist.
ALL GOVERNMENTS ARE HEADING FOR THIS DILEMMA.
http://www.zerohedge.com/article/guest-post-feds-most-dangerous-game-checkmate
Backed into a corner – you see despite what the politicians say – this crisis was never ‘solved’, it wasn’t even tackled or recognised – all it was was KICKED DOWN THE ROAD.
I don’t know how to put this nicely – so I won’t – we are totally fucked, it’s just a matter of time before the big balls drop – Spain defaults and collapses the Euro, the US loses it’s status as a reserve currency and China tries to slow it’s overheating economy (which will either work and send the rest of us into depression, or it will fail and the worlds second largest economy hits uncontrolled price increases)
We call it the ‘black swan clusterflock’ and when you add into the mix a nuclear catasrophe in Japan, a middle east uprising, numerous earthquakes and forest fires in Russia – it all adds up to mass carnage.
Your politicians missed it first time around – and they’re going to miss it a second time around. Don’t be surprised if ‘a war’ or ‘a terrrorist incident’ occurs at the point of collapse in order to provide cover or a distraction.
WAKE UP SHEEPEOPLE
Anon E Mouse
Clive – Calm down fella. We all know the world needs a different model to run on – we’ve all seen “inside Job” but your post is just OTT.
There was not a “nuclear catastrophe” as you call it in Japan – just an accident and forest fires in Russia are not going to result in “mass carnage”.
Of course if you have a solution to your ‘black swan clusterflock’ please feel free to let us in on it…
Mark Stevo
I don’t consider myself a member of the tin-foil hat brigade, but he’s right when it comes to the US – without adjustment of some form the merry-go-round will stop at some point.