Economic facts and myths…

There have been and are a lot of myths continually circulated about debt, Labour’s record in power alongside benefits (notable the stigmatising idea of ‘scroungers’) and the ‘need’ for cuts to restart growth. I have tackled these themes previously, but with news that disposable income is at a 9 year low, as benefits are being cut despite benefit fraud only equating to £1.6bn a year, alongside there being only around 200,000 vacancies for over 2.4 million people unemployed in early 2012 whilst the super rich are hiding at least $21 trillion in tax havens this idea that it’s Labour’s fault (despite the Tories accepting Labour’s economic spending plans up to 2008) is an ideological smokescreen by the Tory Government to enact their dream privatisation, social Darwin inspired slash and burn, help the rich economic and political policy framework.

It is often forgot that after the 2WW, as a percentage of GDP the UK was in over 250% debt – even after a £1.5 trillion bank bailout the UK economy now is in only around 60% debt. Instead of investing in a welfare state, the Tories are embarking on a critical attack against one of the most proudest things Britain has created. But cleverly, unlike Thatcher, they mask their intentions with lies and propaganda about how they want to make life ‘fairer’, ‘equal’ and talk about how there is such a thing called ‘society’. When scratching beneath the surface you see what the party funded 50% by the City is really about.

Excuses after excuses…

Hollande recently returned the favour of snubbing Cameron when he entertained Ed Miliband instead – as Cameron had to deal with Romney, even though his reason for not meeting Hollande was because he was only a ‘candidate’. France have changed the debate in Europe, and today have introduced a financial transaction tax of 0.2%. Europe are now talking about euro bonds again, with Hollande clearly having an effect upon Merkel. Europe are constrained by the restrictions of countries needing less than 60% of GDP debt and 3% deficit – this is something I recently wrote about, given the recent increased tightening of such restrictions. However, the ideological direction has changed in Europe with Greece’s new coalition that supports the bailout even disagreeing on cut agreements after needing two elections to fend off the anti-austerity movement and public outrage at the Troika’s proposals. In fact, the IMF have recently warned the UK that they may need growth inducing policies such as a VAT reduction to help kick start the economy.

As benefit claimants are attacked and people are told to get a job, despite there being a shortage of jobs – the Tories keep claiming that their economic strategy is working despite leading us back into recession. They will carry on blaming Labour, and if that fails the weather or the Jubilee but it is the government’s slash and burn approach to economic policy that has got us back here.

All this is evidence of the falling rate of profit endemic within capitalist operations.

The ‘logic’ of capitalism’s falling rate of profit: sack workers, decrease wages, increase prices, spend more and more on expensive capital upkeep/investment in a desperate bid to maintain unsustainable profit as demand goes down as people have less to spend, and so companies end up going bust and the economy suffers, not profits, for the majority. Eventually, as Marx talked about – monopolisation of capitalism happens as smaller companies and organisations are swallowed up by capitalists’ dog eat dog mentality as bigger corporations get more power and healthy competition is undermined – as we have seen with banks not lending to smaller organisations.

And the worst of the cuts are yet to come.

Essentially, capitalism needs debt to survive. It has been a victory for right-wing propaganda that the right-wing media monopolies have successfully created a narrative that it is the public sector’s fault and the public sector needs to be reformed to become like the private sector; that the welfare claimants are a key cause of the crisis, and that people on benefits are lazy and are scamming the state and hard-working ‘alarm clock’ Britain; alongside, the lie that it is Labour’s fault for spending too much despite there being a £1.5 trillion bank bailout of the PRIVATE SECTOR.

These are some of the issues, with a focus on the nature of the private sector, I hope to focus on when I go back to University, to complete my Masters, in my dissertation project. It’s really important that we keep fighting against the myths and understand the complexity of the situation and the vested interests that undermine realistic valid debates being widely circulated amongst the public. This is one of the things The Break-In Project is addressing, which Jay and I are the founders of.


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