A massive failure of journalism is being corrected

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Via It’s austerity all right – but not of the kind we actually need, City A.M.’s Allister Heath makes his case:

It has long been a theme of this column that the government and its critics alike have exaggerated the extent of the government’s belt-tightening. The coalition is doing this to try and reassure the bond markets while seeking to minimise the hit to the public sector; the opposition because it wants to blame the recession on “the cuts.” But there are two kinds of austerity: governments can either hike taxes or cut spending. Britain is definitely getting plenty of the first kind – but it is getting far less and far too little of the second kind than is usually understood.

The Telegraph report that Tullet Prebon have told the Government “Austerity is a myth to con the financial markets”. Their strategy note, which lashes the Government, is here.

In previous posts on economics, I have indicated some of the charts which show what the Government is actually doing: increasing cash spending, increasing taxes and hoping growth turns these into deficit reduction while increasing the national debt.  However, the truth is also that, while the overall picture is one of increasing spending, some extremely difficult and painful choices are being made by both central and local government.

It’s an absurdity that increasing spending means painful cuts, but that is what big government has delivered. That must change but, in the meantime, I am glad that at least two newspapers have begun to explain to the public what is truly going on and the reality of the problems we face.

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Comments & Responses

2 Responses so far.

  1. mike baker says:

    but which ARE the papers telling it like it really is?

  2. Nick Heath says:

    Hilarious to hear on the Today program this morning a bond trader being described as the only person to deny the fact that government spending is being cut. Surely the figures speak for themselves?!