Yes indeed, Thomas Carlyle in the 19th century was right to describe economics as "the dismal science" and nothing has changed since then. A good part of its inherent misery stems from the fact that our economy is run by crafty politicians who constantly bribe us with our own money but even more depressing is the fact that they do so with our connivance! We (sort of) know it but we don't wish to face it. The only 'good' thing, if that is quite the word, is that sooner or later 'truth will out', or perhaps, 'reality will in', whichever, it is always exceedingly "dismal" when it does occur. Needless to say, when it does we blame the politicians which makes them even more cynical and contemptuous of us because they know that we knew all along that they were running a giant Ponzi scheme but we just didn't have the guts to tell them to stop because, actually, we quite like being bribed with our own money.
Anyway, truth and reality are now beginning to knock on the door of H.M. Treasury even if 'Boy George' and 'Dim Dave' are not talking about it. The details are explained in an excellent article written by Robert Colville and Sam Dodge in today's Telegraph. If, like me, you prefer your complications in diagram format, then this article provides a very good one:
The very essence of the piece lies in #3 which shows that this financial year the Treasury was expecting, as a result of all those extra workers now employed on all those new jobs that 'Boy George' and 'Dim Dave' never stop boasting of, an increase in income tax receipts of +6.8%. Alas and alack, all they are going to get is a decrease of -0.8%!. 'Something wrong with our bloody tax, today', as Adm. Beatty nearly said! The important point for us all to appreciate is that the shorfall of some £2.6bn will now have to be borrowed - and we will have to pay the lenders handsomely for the privilege. Correct me if I'm wrong but I seem to remember that we are already paying in excess of the combined defence and education budgets merely to meet our existing interest payments on our borrowings.
The fact of the matter is that here, just as in Europe, and just as in America, nothing has been done to correct the fundamentals following the 2008 crash. Each of these power blocks needs to face up to some different but equally hideous and difficult decisions which will hurt their suckers their electorates. Needless to say, they will continue to avoid action for as long as possible in the hope that the problem will pass on to the next administration. Alas, 'Boy George' can't leave a note to his successor telling him that 'there is no money left' - that 'joke' was used by the previous Labour minister.
Do read The Telegraph article, well worth it.
