Wednesday, 22 April 2009

The budget

Once upon a time I managed an organisation which provided advice services, of which money advice was a significant element. When someone came to us for help, usually because they were close to despair, we reviewed their outgoings and their incoming finances and sought to achieve some form of balance. This usually meant reducing their spending and maximising their income until their debt was clear. We always warned about the long term consequences of borrowing more to fix short term problems.
Spending our way out of a recession is an economic theory above my pay grade but then I have difficulty working out how much of the debt we are taking on is spendable new money. After all isn't much of the debt to cover the losses by the banks and the remainder to cover the Governments costs in running services because of a reduced tax take. So, if spending our way out of the recession is the theory then we are only using a small percentage of the loans we are taking out to do that.
Apparently we are to find £15 billion in efficiency savings over the next few years. Any Government that was inefficient to the tune of £15 billion shouldn't be in power anyway, but is it not time that we told people the truth, we cannot do everything we want to with the money we have and some things have to be prioritised.
The biggest political challenge we now face is finding politicians who will tell people the truth on water rates, the regional rate and the limits on service delivery.
People have to live within their means, so do Governments.

2 comments:

  1. Spot on. I don't get this "we're in hole, so let's keep digging" logic, myself.

    The Republic seem to have taken the completely opposite approach of doling out the nasty medicine by the bucketful.

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  2. Brown's only policy has always been to spend as much as possible.

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