August 22, 2012
The use of austerity has worn thin at least for the probable longevity of George Osborne. In its current form at least. Infrastructure spending by this two faced Government amount to allowing private roads to be built which is certainly going to provide some relief to chronic unemployment and incrementally it may result in economic improvement. But it is not what they set out to do, which is to build a bigger economy. That, they surmised, would result if we do what we would want a government to do, to protect wealth – to sustain privilege.
Which seems based on the misapprehension that wealth itself is a thing. It is not, really. It is the flowing of money that is the thing. The flow of money between viable entities finding areas of demand and creating supplies to meet them. I am hungry. I go eat a sandwich. And Joe’s is just around the corner. These connected imperatives, these compelling reasons to do things. Art. Achievement. Enterprise. Hobby. Obsession. A society with flows inward to fewer central points creates poverty as well as pockets of wealth. Taking risk on credit creates debt with a chance of wealth. Governments tend to run in debt as a natural state, hoping to improve things sooner.
If the measuring stick of a society is the degree of economic growth it can achieve, it establishes an instant demand for more population to share the load. If we can find an honest way to limit the growth of humanity we can then modulate our economics to fit more comfortably than the monied classes feeling they need to accumulate so much more than anyone else before anyone else gets their filthy mits on it. It is not so much that economies are inflating by increasing the money supply and devalusing currency slowly – it is the only way to evaporate the effect of trillions of dollars locked into tax havens. Unproductive wealth is the economic glutony of the modern world. And it works like cortisol in the body, it adds sink holes to the economy – which means that there is less actual cash in the system.
This is an ever accelerating economic phenomena of allowing tax havens. To attract people with a lot of asset income to reside Governments are obliged to allow tax havens into the economic equation.
The net effect with devaluation is to make the funds that tend to be locked into tax havens more at a risk of devaluation if left in your currency. The problem is that the Governments are compelled to compete for such retinues as those of the religiously rich.
Job creation by government in times of economic emergency yes. This Government’s record at economic improvement? Negative, trending: negative.