George Irvin, University of London (SOAS) Britain’s Slumponomics 22/12/2015 1.
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Transcript of George Irvin, University of London (SOAS) Britain’s Slumponomics 22/12/2015 1.
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George Irvin,
University of London (SOAS)
Britain’s Slumponomics
21/04/23
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UK’s Crisis Three aspects:
Government budget NOT like a household budget
Why cuts weren’t necessary
Austerity isn’t working---reverse the cuts; we need growth!
and … we need equality
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UK growth
x
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Myths of Thatcherite economics
Public borrowing not a ‘burden on future generations’
Govt borrows mainly from its own private sector (80%)
If I hold a gilt, it’s an asset for me, not a liability Cause of crisis: Govt borrowed from public to
‘bailout’ the banks Rich hold the assets poor suffer the cuts in public spending
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Crisis caused ▲public debt (not the other way round!)
Year 2008 2009 2010 2011
Fiscal balance as % GDP
BE -1.3 -5.9 -4.2 -3.5
DE -0.1 -3.2 -4.3 -1.2
FR -3.3 -7.6 -7.1 -5.7
GR -9.9 -15.8 -10.8 -9.0
IR -7.3 -14.2 -31.3 -10.3
PT -3.7 -10.2 -9.8 -5.9
SP -4.5 -11.2 -10.4 -9.4
UK -5.0 -11.0 -10.4 -9.4
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Lies, damn lies & stats …
How debt measured? Gen Govt Gross debt (red) includes
public bonds held by govt itself financial interventions
Govt Net Debt (blue) is only:
• Public debt held by private sector net of interventions
NB: Public liability = Private Asset
In 2008/09, UK net debt smaller than 60%!
in 2010 net Govt debt < 60%
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UK Austerity isn’t working
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Longer than ‘Great Depression’
source: http://www.newstatesman.com/blogs/david-blanchflower/2011/07/growth-niesr-recessionblack dot: NIESR prediction for end of current recession
This is longer depression than 1930 (NIESR): may not end before 2015
We are here
Recovery up here
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Cutting Govt spending doesn’t work
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Unfair income distribution in UKIn 1970 ratio of average workers wage to avge CEO pay was about 40:1
Source: Compass High Pay Commission (2011)
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Growing inequality is the real problem in the UK!
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Rise in UK Gini coefficient for gross household since 1979; (wealth GINI far worse)
Selected 2008 Ginis:
USA0.41
UK 0.36
France0.33
Germany0.28
Denmark0.25
Sweden0.23
Source: Hills Report (2009)
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Osborne’s ‘austerity’ Notion that Britain needs public austerity to promote growth is
unfounded and incoherent!
‘Going for growth’ means adopting large state-led investment stimulus package.
Create jobs; green the economy; finance through combination of QE, FTT (now adopted by DE, FR) and reducing tax evasion
‘Tax gap’ (evasion by persons & companies) now costs us £25bn a year
Balls at last getting away from ‘cut slower’ argument and focussing on grown
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conclusion
THE END (is nigh?)