Vince Cable may lash out at the debt ceiling “nutters” in the US, but their fellow adherents to ideological purity on the Tory backbenches are out in force.
Business secretary Vince Cable attempted to burnish his progressive credentials yesterday, when in an interview on The Andrew Marr Show he lashed out against right-wing ‘nutters’ in the U.S. Congress, who are playing a game of economic chicken with President Obama.
“The irony of the situation at the moment… is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress rather than the eurozone.”
The current crisis focusses on the U.S. government’s debt heading towards a ‘ceiling’ imposed on it by legislation from the 1930s and 1940s, but has been raised consistently by Congress as appropriate since 1979. However, these Tea Party crazies have the sympathy of the mainstream of Mr Cable’s coalition partners, the Conservatives.
Arguing for a debt ceiling for the UK on Conservative Home, Tory MP Sajid Javid welcomed the political deadlock which is taking the world economy to the edge of financial turmoil. He wrote:
“America’s debt ceiling has taken it to the economic precipice. This is both deliberate and welcome.
“If political leaders fail to reach an agreement on slashing government spending by August 2nd, then the United States will default on its debt. Such an event would send shock waves through the global economy, putting the Eurozone’s problems instantly in the shade.”
Hurray for unemployment and stagnating living standards all round! He has introduced a ten-minute rule bill into parliament, which is due for its second reading in January when we will see the extent for its support on the Tory backbenches.
Javid has widespread backing from the Tory think-tank world. Tom Clougherty, executive director at the ultra-free market the Adam Smith Institute, wrote:
“Bravo, Sajid! I’m a big fan of the idea.“
He goes on to say that we should go further than Javid’s bill:
“As Sajid suggests in his ConHome piece, we should cap the national debt at 40 percent of GDP… tied. We should cap the budget deficit – at 3 per cent of GDP – and the overall size of the state – at one-third of GDP. Again, these should begin as legally binding targets, to be achieved by a specified date.
“We should also have clear rules on what the government can borrow for (capital investment) and what it can’t (current spending), and ensure that all government is transparent and ‘on-the-books’.
“Finally, we should limit the government’s ability to raise taxes arbitrarily. I’d say that any tax rise not specifically detailed in a governing party’s general election manifesto should have to be approved in a referendum.”
If these rules had been in place in 2008, it would have been impossible to bail out the banks, and would have led to a far deeper recession than we did indeed experience. If Mr Cable is worried about right-wingers sacrificing the well-being of millions for the sake of ideological purity, he doesn’t need to look across the Atlantic – alongside him on the greenbenches will do.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.