Mr Micawber on austerity

Apparently, the Tories failed to get an overall majority because they’re committed to austerity and the electorate wants to end it.

Surveys bear this out: 48 per cent say the government should raise taxes and spend more, while 44 per cent are happy for things to stay as they are. That leaves a meagre eight per cent for the undecided and those who’d like to see taxes and spending cut.

Here I have to disagree with those who claim that polls are worthless. This one provides two invaluable insights into the state of Britain, one primary, the other secondary.

The primary insight is that 92 per cent of the electorate are economically illiterate morons unfit to vote. The secondary one is that universal suffrage no longer works in a country where 92 per cent of the electorate are economically illiterate morons unfit to vote.

Allow me to elaborate in simple words even those 92 per cent have a sporting chance of understanding: It’s impossible to end austerity for the simple reason that IT NEVER BEGAN.

Austerity means spending less than you earn. This earth-shattering economic discovery was tersely expressed by Dickens’s Mr Micawber: “Annual income twenty pounds, annual expenditure nineteen, nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Now let’s start small and then extrapolate to a larger scale. What are the annual spending options of someone who nets £30,000 a year?

Spending less than £30,000 would spell austerity. And the further he goes below that sum, the more austere he gets.

Spending £40,000 a year would be madness. He’d have to borrow £10,000 every year to cover the difference. Add to this compounded interest, and before long bailiffs will come banging on his door.

But what about spending £33,000? Ten per cent more than he earns? Would that get him into the area of austerity? Of course not. It would still be madness, if slightly less severe than in the previous hypothetical case.

Now according to Adam Smith this homespun economics applies to the state: “What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.”

So how austere is our great kingdom? The answer is: exactly as ‘austere’ as my last hypothetical man who spends 10 per cent more than he earns. Our government does just that and, like him, it has to borrow the difference.

True, the government won’t receive a visit from a bailiff, but that doesn’t mean it can’t go bankrupt. It will, when it can no longer service the national debt. Ours currently stands at close to two trillion pounds, and it’s rushing towards that new threshold of misery at a rate of £5,170 per second.

Our hypothetical spendthrift would borrow from the bank or credit card companies, and he’d have to pay interest. A government borrows from the money markets, which too charge for that privilege. At the moment it takes HMG 10 per cent of its tax revenues to service its debt.

So where does austerity come in? If you have to ask that question, you aren’t in the 92 per cent. Moreover, you obtusely insist on using words in their real meaning, rather than the one assigned to them in the pernicious jargon of modern politics.

The way all political parties use the word, it doesn’t mean spending less than the government earns. It means continuing to spend more than the government earns, but at a slightly lower rate than before.

We’re now slightly less economically insane than under previous administrations, and the moronic 92 per cent want us to stay at least as insane as we are now, or preferably become more so.

As a result of tax-and-spend insanity, Britain is teetering on the edge of economic calamity, for all the bogus forecasts the government releases, with the words ‘smoke and mirrors’ springing to mind. We’re staying afloat, just, only because our current policies are marginally less insane than before.

A drastic increase in taxation and public spending can easily kick us into an abyss compared to which the 2008 crisis will seem like halcyon days. Our moronic 92 per cent don’t realise that. They think they’ll enjoy the spending while someone else will suffer the taxation.

In fact, extortionate taxes will ruin everybody: those in the high marginal rates directly; others indirectly – by destroying the economy.

In my book The Crisis Behind Our Crisis I describe the destructive mechanisms in quite some detail. Suffice it to say here that the ruinous effect of profligate tax-and-spend policies has been empirically proved in every country they were tried, including Britain.

The pattern recurred over and over again: a Tory government would leave the economy in decent shape by trying to reign in the insanity. Then a Labour government would come in and wreak havoc in a few months or at most years.

Now the situation is much worse. If you look at their economic policies, the Tories are effectively Labour, and Corbyn’s Labour are effectively communist. That means the Tories are running the economy into the ground, while Labour are digging the grave in which they’ll bury it.

Already under Brown the Exchequer went further than even leftwing orthodoxy demanded. Having inherited a reasonably healthy economy from the Tories, they remained almost sane for the first three years.

An economic boom ensued (how real is a different story), but then the Labour economy gurus Brown, Balls and Miliband confounded even the Keynesian rule that a government needs to run a surplus at boom time. Instead those subversive chaps started borrowing at three per cent of GDP, the maximum allowed under EU rules.

That had nothing to do with economics – modern politics only pretends to be about that. Modern politics is solely about politics, which is to say staying in power by any means, no matter how criminally destructive.

Given an electorate utterly corrupted by the culture of something for nothing (otherwise known as the welfare state), that means issuing any promises politicians can’t keep, nor even intend to.

The most calamitous effect of such politics isn’t economic, bad as it is. It’s moral and intellectual: that’s how 92 per cent of the electorate have got to be illiterate morons.

All it took was for a sinister figure like Corbyn to appear on the scene for them to rise in revolt against what’s mendaciously called austerity. They want the state to extort even more money from those who earned it and transfer it to those who didn’t.

Bizarrely the desired recipients of government largesse don’t even include pensioners, those who worked for decades hoping to provide for their old age. They can starve for all the 92 per cent care. The extra money must instead be pumped into the pockets of parasites who haven’t done a day’s work in their lives.

Oh yes, we must also spend more on the NHS, education and just about everything else, you name it. None of this has anything to do with reality; none of it is sane. It’s wicked politicians exploiting the mass idiocy they themselves have fostered for their own nefarious ends.

Mr Micawber, where are you when we need you?

7 thoughts on “Mr Micawber on austerity”

  1. Lovely!

    I hope you can agree with me paraphrasing Peter Hitchens on the rise of Corbyn:

    ’50 years of comprehensive education has done its work…’

    Or how about V.S. Naipaul criticising the Blair regime for creating a ‘dumbed down, aggressively plebeian society that celebrates itself for being plebeian.’

    We are now living in the age of idiocracy.

  2. Excellent article. One tiny, pedantic point: insanity is reined in, not reigned, though it is true that in our country insanity reigns supreme.

  3. “48 per cent say the government should raise taxes and spend more, while 44 per cent are happy for things to stay as they are.”

    The welfare state in all manifestations. As they used to say in England a long time ago: “Once you give the Dane geld [gold] you never get rid of the Dane”.

    Same with the welfare state.

  4. What does the national debt matter? Keynesian analysis claims it doesn’t because we owe it to ourselves. Best get that money press fired up and ready to go…

    1. Before we get indignant about UK government debt we must remember that UK private debt is almost as big. That is almost two years of GDP in total. Any attempt to cut either personal and government spending will kill the economy and your GDP will shrink and the debt to GDP ratio could reach double figures. There are many countries in this situation (including the USA). There is apparently no published plan by any government to manage the crisis when the defaults ripple across the world. Perhaps the government folk will tiptoe away and the robber barons and warlords will take over and things will revert to AB’s beloved thirteenth century.

      1. Debt isn’t an issue providing it isn’t comprised of fiat money. If government folk did tiptoe away, at least in the realm of economics, then we would all be the better for it.

        1. Well I suspect that what you say could very well happen and it would certainly get us back to the thirteenth century. And AB thinks we would all be better for that. All ‘money’ is a confidence trick claiming to be a store of value but not related to its intrinsic worth. Gold does have some minor physical utility, but would you accept bitcoin? At least people who accept payment in cattle or horses can see the value in them. The Norman knights were paid in land (stolen of course as it had been by a succession of owners in the past). Land remains the only reliable store of real wealth, valued according to what you can dig out of it, grow on it or the rental you can charge for it. You can of course lose your life for owning it if the government loses control of civil order.

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