Deficits, cuts and growth: a metaphor
I’m not the most economically-minded guy in Britain; I have an English degree, after all. Listening to Osbourne focus on cutting back spending (according to IFS estimates, by up to a quarter in some areas), and Darling railing against this, I’ve tried to get my head around the whole situation.
As a country, we’re spending more than we’re getting in, and we have debts.
If I were spending more than I was getting in, and had debts, I would look at it this way:
- I can’t much cut spending without hurting myself. I need to pay rent, bills, buy food and generally not be a hermit. I could not go out of the house, see friends or buy the occasional album on iTunes, but I would steadily go quite out of my mind.
- I can buy cheaper food. I can have one pint and drink it slowly, rather than getting drunk, and that won’t hurt me. It might annoy me, but it won’t do me any harm.
- I can supplement my income, by making a little money on the side through photography (in my case – it could be through anything, so long as it’s legal…), or by getting a new job that pays better.
- There’s not a lot I can do about my debts. They’re a regular monthly outgoing (hello, student loan of £25k, I’m looking at you), and can’t realistically be reduced any more than my rent. There’s no point trying to pay it off faster than my creditors want me to – or I’d end up being a hermit.
Osbourne wants us to focus not only on efficiency (buying cheaper food), but also on cutting back – not going out, seeing our friends. While it might look like a good strategy, it’s going to hurt the country in the long-term, just as if I stayed indoors all day every day would start to hurt me.
Supplementing income is the best strategy – our creditors aren’t knocking on our door trying to evict us just yet. Growth is the key, not cuts. We can ill afford to ignore the deficit – but we can afford even less to damage this country, inhibit growth and inflict 1980s misery on the less fortunate sectors of society. Not everyone is a millionaire, unlike much of the cabinet.
Cuts just don’t make sense.
