Although I tell you that I intend to post more often on this blog, the reality is that I do not. So many things can become victims of the failure of good intentions. I do suffer from depression; not in the clinical sense, you understand; but in the sense of a complete lack of faith in our government and institutions. I do not mean government in the simple sense of David Cameron and Nick Clegg and their associates — although that is depressing enough — but in the sense of everyone who is supposed to be in charge of something — the government, of course, but also the banks, local government, the schools, the NHS, everything. Nothing works as it should and/or it costs a fortune.
At the head of our country is an Establishment that protects itself, that protects its wealth, that seems oblivious to the mess that lies around them. We now have a cabinet of rich public school boys who have been career politicians for almost the whole of their lives. The input of experience is severely limited almost to the point where nothing is known of the world outside the social circle of Old Etonians. For years politicians have invented policies based on nonsense and fallacies. Investment bankers play with huge amounts of our money to make more for themselves without really understanding what they are doing. If train drivers and airline pilots did their jobs with the levels of competence achieved by the bankers there would be dead bodies all over the planet. The government of this country has over the last 30 years piled up vast debts to the point where there is little chance of them ever being repaid. Some will argue that this does not matter because many of our debts are long-term and for the most part are internal debts. But we need $45 billion per year to finance these debts. It is an on-going investment in waste. So they print money, wreck the currency, keep interest rates at virtually zero per cent in order, in the long term, to inflate away the debts. It could possibly work — although it is a policy of despair — if we stopped piling up more debt. Yet last year, we increased the accumulated debt by £120 billion; we will add another £120 billion this year; and yet another £120 billion next year. If we retain our credit-worthiness, that extra borrowing over these three years alone will add £9 billion to our annual interest payments. The amount that the government borrows is increased every year because it needs more and more just to pay off the annual interest charges. It is absurd. They need to cut spending by 25%. Now! They are not doing anything at all. They shuffle the numbers about every year but overall the situation just gets worse and worse.
In its attempts to stem the floods, the government is attempting to cut expenditure and has made tens of thousands of public sector workers redundant. But these displaced workers cease paying taxes and need unemployment benefits. So the government balance sheet does not improve much.
What can be done?
First the government must collect all their taxes. There are armies of people in all kinds of jobs working for cash in hand and no VAT or income tax — particularly this is a problem in the building trades. These taxes must be collected. All corporate taxes must be collected. It is totally unacceptable to have senior managers in HMRC coming to cosy agreements over dinner in 5 star hotels and letting large international companies get away with not paying hundreds of millions in tax. Nor should big multi-nationals get away with not paying taxes to anyone on this planet. That corporate monster Apple was reported last week as having attained that Nirvana where it had a partner company that had no staff, no directors, turned over about $1.5 billion per year yet was domiciled in no country whatsoever and paid no tax to anyone.
In addition to collecting taxes the government must cut spending. Inevitably this will put more public sector workers out of work. New jobs need to be generated to get the economy moving again and to get people earning wages. Top priority should be the construction industry. Building houses and roads cannot be exported abroad no matter how much the financial speculators would like to do so. And building houses generates jobs making the building materials, windows, door, kitchens, bathroom, etc. We need to build in excess of 220,000 houses per year to meet demand and bring down the price of houses to the point where young people can afford them. This means cutting house prices by at least 25%. This will leave some owners with negative equity and the government needs to address this problem Once anyone has bought their home, its price does not matter except to those who will inherit. I read an article in The Times yesterday which pointed out that if the price of food had increased as the price of houses had in the last forty years, a chicken would now cost £50 and a loaf of bread nearly £5. The price of houses is absurd.
I could go on about the youth unemployment rate; where the youngest and fittest members of our community are educated but unemployed, already lumbered with debts because their university education involved loans not grants and demanded payment of ever increasing tuition fees which in my day were paid by the government. Government demands ever more payments in taxes but provides less services. The roads are in a terrible state; broken and jammed up they are another millstone around the neck of our economy.
People around the world are becoming more disenchanted with their rulers. Everywhere corruption in some form is rife. Politicians become ever more obsessed with surveillance. At the week-end, Max Hastings in the Daily Mail asked if democracy was dying. It is certainly not in good health. I was optimistic when we achieved a coalition government in 2010 but the reality has been a failure. There is a lack of commitment to pulling together and a feeling in the two parties that they need to set out their display windows for the election in 2015.
In the USA, Mr Obama may be the first black president but there will be little else for us to remember him by. In operation he has been little better than George W Bush.
Is it surprising that people are rioting in the streets or voting for fringe political parties. What will become of us? Has Britain no Churchill or Attlee waiting in the wings?
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