The Austerity Lie

If politicians are ideologically opposed to a particular policy, it's easy for them to say "we can't afford it". After all, that's a concept that people understand. Everybody knows there are things they want, but can't have due to lack of money.

Encouraging us to believe that government finances operate in the same way as a household budget is a trick being used to justify the current savage attacks against the Welfare State. Politicians hope that by offering an economic justification their true motives will not be challenged.

We are told that changes will need to come in the NHS because it has a shortfall of £22bn. We are also told that the welfare safety net, supposed to protect those unable to defend themselves against the worse ravages of the capitalist system, will be subject to a further £12bn of cuts. The necessity for these cuts is based on a lie.

When government decide to renew Trident for £100bn+, or announce the go-ahead for HS2 at a cost of £50bn+, the question of how it will be paid for is never raised. That's because there is no question. They have already committed to carry these things through, and can raise the money they need through the UK central bank, the Bank of England.

The Bank of England can create money for any purpose, and this new money can be used to fund any project. The transaction effectively is one part of the state guaranteeing a line of credit to another part of the state, so that a policy can be enacted to obtain goods or services needed for that project.

So do not be fooled. When you hear that we can't afford this particular service, or there is no more money for that service, what you are really hearing is a politician saying "I don't believe in that politically, so I choose not to fund it from state money." It is not about the money!

Politicians of every political persuasion should be held to account when they use the Austerity Lie, because those who use it are tricking us into accepting their agenda, when they should be representing our interests.