We don't want to see growth plunge, we don't want to see people losing their jobs and we definitely DON'T EVER want to hear Little-Lord-Osborne utter the dreaded words "We need to do more. We just need more cuts."
Please, take a moment to read this from wiki on the last time we had huge debt and attempted to solve it with austerity and cuts. It led the world to broadly adopt a more Keynesian approach - whilst households should cut back in tough times, governments should not. They should spend where it stimulates growth, always doing the simple sum "If I spend this money, will it come back with interest?" If the answer is "Yes" then government should stimulate the economy and worry about its debt when times are more comfortable.
When a loan to Sheffield Forgemasters would have saved a thriving business and kept hundreds in jobs, then the tax ultimately taken would have far outweighed the original loan, never mind the interest they would also have earned.
When Labour had proposed to spend on repairing and building schools, the construction industry would have received a huge boost too. It's no coincidence that today's figures are so shocking because construction fell by 3.3%. In a quarter!
I'm hearing some fairly respectable commentators argue that these figures are not much to do with Osborne. Certainly they aren't all his measures, but there are factors that he and he alone is responsible for that have led to today's shocking blow to the economy.
1. Optimism. There has been little solid plan for how the coalition would create or support growth in the economy. Cuts were seen as enough and somehow, magically, the Private Sector would pick up the slack. The entire narrative has been of austerity, pain and blame. Business confidence fell sharply in autumn last year and although UK business is sitting on a surplus of over 600 Billion, they don't have enough faith in recovery to spend it. If we, the belt-tighteners can't spend, we really, really need business to.
2. "Efficiency Measures". They're really not. Most government spending was propping something up somewhere or saving more money from being spent elsewhere. The NHS alone is to find 25 Billion in "efficiency savings" and believe me (and the two months or so I just spent in and out of hospital) you don't save that kind of money from bandages and paper clips. Contracts are cut, service providers make redundancies or go bust and staff are cut. That's a lot of people not buying new cars or houses any time soon.
3. Stimulus. Whilst lots of cuts haven't taken place or effect yet, stimulus has often been withdrawn, and if businesses go bust or houses are repossessed or jobs are lost, that's all extra unemployment benefit and housing benefit to pay. What's more, you get less tax coming in, so there's even less money in the "plus" column.
Now, no-one seems to be saying much about the deficit do they? Remember when it was all a politician could talk about? Osborne predicted he would inherit a deficit of 200 Billion. At it's worse it was well above 170 Billion, but due to the stimulus measures Labour put in place, growth was strong and the UK was predicted to grow out of recession faster than any other Euro nation. By the time Osborne took over, it had fallen to just over 150 Billion - nearly 25 Billion in less than a year.
Since Osborne took over, anyone know what the figure is? How much have we saved from all this pain? All these jobs lost or soon to be? As I quoted earlier,
"With three months of the fiscal year remaining, the government may struggle to keep the deficit to the 148.5 billion pounds forecast by the Treasury’s fiscal watchdog in November."Haven't seen that reported anywhere today, though. Funny.
Talking of reporting, I care about this stuff and had just written about it when the figures came out, but even I was a little mislead by the headlines. "UK growth shrank by 0.5%" Everyone reported.
I took it to mean "Wow, 0.7% last month, less 0.5% today, must mean 0.2% positive growth."
No! take the +0.7% of last quarter and reduce it to -0.5% overall. A contraction of 1.2%!!! That's 4.8% and it's enormous, shocking, frightening.
All those people who were so scared about the debt, the 36.1% who voted Conservative, all 10,726,614 voters (Oh yes, I am being specific) who chose the only party openly saying they would clear the entire deficit - really should have been much, much more frightened of the wrong plan to reduce it. Debt was never the issue. Whether the wrong plan could lead us into depression most certainly was.