IT'S AN AESTHETIC ISSUE, NOT AN ECONOMIC ONE:

The biggest lie in British politics (Johann Hari, 29 Mar 2011)

British politics today is dominated by a lie. This lie is making it significantly more likely you will lose your job, your business, or your home. The lie gives a false explanation for how we came to be in this crisis, and prescribes a medicine that will worsen our disease. Yet it is hardly being challenged – except by some of the world’s most distinguished Nobel Prize winning economists.

Here’s the lie. We are in a debt crisis. Our national debt is dangerously and historically high. We are being threatened by the international bond markets. The way out is to eradicate our deficit rapidly. Only that will restore “confidence”, and therefore economic growth. Every step of this program is false, and endangers you.

Let’s start with a fact that should be on billboards across the land. As a proportion of GDP, Britain’s national debt has been higher than it is now for 200 of the past 250 years. Read that sentence again. Check it on any graph by any historian. Since 1750, there have only been two brief 30-year periods when our debt has been lower than it is now.

Sure, it's irrational, but one should never underestimate the power of sentiment over reason.

Posted by oj at April 3, 2011 9:10 AM
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