What Is Wrong With Austerity In One Graph

UK Central Government Finances - Economic Research Council

UK Central Government Finances – Economic Research Council1

I think that this one graph shows what is wrong with austerity. The deficit is not just about government income – it is about the difference between income and expenditure. The massive cuts that the Conservative government has imposed has decreased government expenditure but has a very big negative affect on the economy and hence government income.

One way to deal with the deficit is to ignore it or even increase government expenditure to boost the economy – Roosevelt’s New Deal or the UK after WW2. The World Economic Forum now ranks the ‘Macroeconomic environment’ of the UK as 108 out of 140 – below Haiti, Zimbabwe and Liberia2.

I have written more about debt here.

There are also some videos on austerity and debt on the Lowestoft Against The Cuts website3.


 

1 UK Central Government Finances, Economic Research Council – (http://www.ercouncil.org/chart-of-the-week/week-11-2015-uk-central-government-finances.html)

2 Competitive Rankings, World Economic Forum Outlook 2015-2016 (http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/)

3 Lowestoft Against The Cuts – Videos (http://www.lowestoftagainstthecuts.org.uk/videos/)

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