Osbornia and The Quarter of A Trillion Pound Man

Lesley Brennan

2 April 2013

Iain Duncan Smith may well go down in history as the Government Minister who said that he could live on £53 per week if he had to.

No doubt his self-confident remark will be used at every opportunity by his opponents  from now till Election Day in 2015.

There is another unwelcome title that another Minister, George Osborne, is earning – that of The Quarter of A Trillion Pounds Man 

This is because the UK Government is now likely to borrow an extra £245 billion pounds over the lifetime of this Parliament by 2015.

This near quarter of a trillion pounds more arises from the Chancellor’s  failure to get the country’s economy on the right track.

Contrast that figure with his initial plan when he assumed office in 2010  to reduce welfare spending over the next 4 years by £18 billion, the latest damaging tranche of which was released this week.

The reason for the additional billions of borrowing has been Mr. Osborne’s policy of cutting public spending.

The Labour Government elected after the Second World War was bequeathed a massive war debt, but it paid this off gradually so that investment could be made to rebuild the economy and found the National Health Service.

However, the present day government is one that prefers private spending to public spending , and is a firm believer that austerity cuts can be made without affecting  economic growth.

In actual fact , the economic growth that promised by now from a re-invogorated private sector hasn’t met their hopes.

Cutting public expenditure has shut down firms and lost jobs in the in the private sector dependent upon work from  the public sector for schools, hospitals, roads, and houses.

The loss of jobs lowers government income from taxation and at the same time raises the need for more welfare spending.

Thus the government’s debt position worsened, and the cuts in public expenditure simply raised public expenditure in another form – unemployment and related benefits.

Paul Krugman, Nobel Prizewinner in Economics , and a shrewd observer of Mr. Osborne’s chancellorship, has written of a country called “Osbornia” where such a policy runs deep.

Click on the image link below to read his article

Mr. Krugman goes further and passes judgement on Chancellor Osborne’s policies as “ disastrous” in this TV interview.

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Mr. Osborne’s policies mean that the average family in Britain will be over £890 a year worse off because of tax increases and cuts in tax credits and benefits in the new financial year which begins later this week.

That is a drop in income of £17 a week while the tax handout for millionaires will provide them with an average increase in income of around £2,000 a week.

 2.65 per cent of this £2,000 weekly increase is all Ian Duncan Smith feels he needs to get by on in a week.

An example of how the average family suffers while the wealthy prosper on Mr. Osborne’s watch.

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