If you want to see Neoliberal ideology in action, look no further than today’s budget. It defies everything – common sense, economic orthodoxy, morality, and even traditional Conservative belief in sound public finances.
It is economics 101 that to stimulate the economy, you need to give more money to poor people. Give an extra £20 a week to low-income people, and they will spend it in on groceries, clothes, fast food etc. In contrast, the rich already have everything they need, the £20 gets put into assets like shares and savings.
Nothing about the budget makes sense. If you are lucky enough to be on a salary of £150,000 then you are already taking home £ 7,441.97 a month after tax, national insurance etc. What difference is a few extra quid going to make to someone on this income?
What do Financial Times readers think of the mini-budget? This is the most-recommended comment on our news story: pic.twitter.com/NXW9u6Iqa6
— Sarah O'Connor (@sarahoconnor_) September 23, 2022
The markets have responded to the £45bn debt-financed tax-cutting by sinking the pound. Sterling tumbled against the dollar to below $1.09, hitting its lowest point since 1985.
From the FT:
“The UK is behaving a bit like an emerging market turning itself into a submerging market,” former US Treasury secretary Larry Summers told Bloomberg TV. “Britain will be remembered for having pursued the worst macroeconomic policies of any major country in a long time.”
The Institute for Fiscal Studies think-tank forecast that public borrowing would top £190bn this year, the third-highest peak since the second world war.
The new borrowing to finance the tax cuts and emergency energy subsidies will be more expensive for the UK, with the two-year cost of borrowing rising to 4 per cent from 0.4 per cent a year ago, as investors sold off government bonds.
But one former Tory minister said the chancellor’s plan was “economically reckless and political suicide”.
What is going to happen now is public sector workers, healthcare works etc will be rightly p*ssed off and we will be looking at strike action all over the shop.
To snub nurses and other key workers so bankers can blow even more bonus money on hookers and cocaine seems to me electoral suicide.
— Harry Lambert 🌻 (@harrytlambert) September 23, 2022
The facts are that more equal societies have a happier, healthier, and more successful population.
But instead, we have a free market ideology attempting to build ‘Singapore-on-Thames’.
To quote economist JK Galbraith, the Conservatives are pursuing a strategy of “private affluence and public squalor”.
.@mrjamesob rebukes Kwasi Kwarteng's mini-budget:
'If the scales don't fall from your eyes today they never will… they think you are so pathetic that they are going to give people like me more money and have you believe that they are actually helping you.' pic.twitter.com/nRWjI6jlA9
— LBC (@LBC) September 23, 2022
I help keep the good ship Slugger afloat by managing the business and techy stuff.