Jeff Randall has done our work for us, thanks to Peter Smith for the links. Each part is about twelve minutes long.
Primarily he's railing against public sector spending and deficits. The way in which the housing market has been used as a massive wealth-transfer programme from young to old (not to mention from the productive economy to the bankers) is covered in the second part.
Well done Jeff! I think we need to start making some of own hard hitting media.
ReplyDeleteThe irony is of course that some of his star witnesses - Matthew SInclair of TPA and David Willetts are hard core Home-Owner-Ists and the latter is the bloke who presided over tuition fee increases.
ReplyDeleteI agree with most stuff here apart from the tired old erroneous focus on government debt. It should be obvious that the real issue is debt in the private sector, this is what it behind the wealth transfers discussed. This private sector debt hugely outweighs the government debt (why not show this as a trail of twenties across the globe?) Furthermore and most crucially, of the two types of debt, which debtor has monopoly control over currency issuance? That in itself tells you which debt actually has the dominant effect on the economy. This means the credit card analogy used in the video is wholly false. Sovereign government and currency are synonymous whether politicians choose to exploit the fact or not. Ultimately though credit money is pure abstraction, the real economy is about ownership, transfer and use of resources and commodities. Taxes and spending have real effects but absolute Government debt is something of a red herring argued by many in support of a smaller state (which may or not be a bad thing), however, the premise is misguided. This is not to say that Governments don't waste money, it is just that the use of public deficits to illustrate it is wrong. Judging public and economic policy should instead be made on the *real* factors in the economy, control and distribution of resources, employment and productive growth.
ReplyDeleteQP, agreed. But actually govt debt and private debt achieves much the same thing and where is the real dividing line between bank debt and government debt if governments have bailed out banks?
ReplyDeleteSome people have benefitted or will benefit from any government spending/debt (including public sector pension debt) and others have to pay it off. As it happens, the beneficiaries of government spending and of bank debts are much the same people (the boomers) and the people who will have to pay off the government debts and the mortgage debts are the same group of future earners.
Unless of course we invent a tax which falls primarily on baby boomers' main asset, i.e. housing, and use the proceeds to pay off the government debts and reduce future earners' income tax liabilities....