I am no expert on economics. I simply do not understand it in the complicated way in which it is presented. However I do think I have a basic grasp of what is wrong with the economy – we spent more than we have, we owe more than we can pay off.
As I walked back from work today there was a march going past Westminster with the usual predictive placards in place – “Stop the cuts” or “Same old story, same old Tories” or the ever present “There is another way”. What, pray tell is this other way I keep hearing about?
I see the same posters telling me of it’s existence, the same people talking of it’s mythical solution and the same sound bites capturing my attention. But I haven’t heard another way that makes sense other than cutting costs.
I know from experience that if I earn 2,000 a month (apologies for a keyboard that doesn’t have a pound sign) and have no debts or necessary expenditure then I have 2,000 pounds to play with. If I earn the same amount but owe 500 on an overdraft and 500 on living costs such as rent or travel to work then somewhere along the line I need to cut 1000 pounds out of my pleasure money that month.
It isn’t rocket science. But even though seemingly sane people accept this in their own lives, for whatever reason they cannot get their heads around the fact the State operates with the same basic rules in place. If it spends more than it can afford, then in order to pay off the debt it needs to cut back on spending in the future.
And regardless of your particular political preference the fact remains that Labour built up a huge debt and the Coalition are left trying to sort out the mess.
Now where these cuts should be made is a debate worth having. The bloated public sector needs trimming. People live longer so should work longer. Expenses for public servants should be cut – for example why should ministers have a chauffeur service when the rest of us spend 350 pounds a month getting to work on crowded trains? .
The health service needs to be ring fenced, because not everyone can afford private health cover. The defence and security budgets can never be underfunded. And however you feel about it, foreign aid to blossoming countries such as India and China is essential. Has anyone ever considered that it might be an investment in the future because we know our time at the top table is limited and having countries like these owe us is only good for our long term stability?
These are purely my opinions on where it should happen, but the fact remains that cuts need to be made.
If you can’t see that 12 years of borrowing money and sinking further into debt brought the economy to it’s knees, then it explains why you are stupid enough to strike. But striking and marching doesn’t mean that plodding on in the same self destructive fashion will work if we stick at it for the next 12 years.
Teachers get about 12 weeks holiday a year and work 9-4. Tube drivers earn 45k a year. And pensions for the the public sector are gold-plated to say the least. Meanwhile, whilst salaries improve in the public sector (funded by both public and private sector taxes), wages in the private sector go down, jobs get cut and people worry about the figures from the next quarter and what it means to them.
The private sector understand that striking is not an option because if you have a job you should count your blessings. If your business isn’t making money then it only makes sense to slash your expenditure. If that means wages, jobs, pensions, hours, etc, then so be it. If the business doesn’t exist then you won’t have any of the above anyway.
The public sector doesn’t understand that striking is not an option because the State is a business in it’s own right. And if it isn’t making money then it makes sense to slash your expenditure. If that means wages, jobs, pensions, hours, etc, then so be it.
Because if the state fails then we become a basket case like Greece.