Saturday, 15 October 2011

How to abolish the deficit

The bailout of banks in the United Kingdom, whose corrupt greed and corporate incompetence on an international level caused the global financial crisis and ensuing near depression, cost in official figures to the country's taxpayers around £850 billion (including £107.1 million in "financial advice").  While according to Bank of England governor Mervyn King, this figure may have been as high as £1.2 trillion. Since the recession, the salaries and luxuriant lifestyles of multinational CEOs and investment bankers have risen, from taxation of the citizens suffering under the austerity of budget cuts and tax rises. The UK coalition government has lowered the rate of corporation tax while being complicit in multi-billion pound corporate tax evasion, lifted the cap on the billions bankers are permitted to pay themselves in bonuses, while raising VAT to 20%, hitting the incomes of working families the hardest.

The UK government uses the budget deficit as its robotically bleated propaganda line to excuse a vicious agenda of budget cuts and privatizations (the trebling of tuition fees being a most prominent example).

Office of National Statistics figures show the country's entire budget deficit, to be "£1105.8 billion, equivalent to 76.1 per cent of GDP. " In general terms, £1.1 trillion. 

A progressive government could implement a radical program of taxation and reform, or a New Deal, of the banking sector. Every penny of the £850 to £1 trillion that the banks were bailed out with would be reclaimed by the treasury, easily affordable from their greatly increased interest since then. Annually raised, would be £25 billion through a war on tax evasion, and  £20 billion from a Robin Hood financial transaction tax. £888 million subsidy of the arms trade that sells weapons to genocidal dictators and juntas would additionally end, while the £130 billion Cold War Trident nuclear weapons system would be abolished. (Many more multi-billions will occur to me through further research and consideration).

This revenue of £1.2 trillion could eradicate the deficit into budget surplus, with no devastating injustice and economic contraction caused by public service, jobs, education, welfare, culture and infrastructure cuts.

Update, on day of the beginning of the Occupation of the London Stock Exchange: this more comprehensively cited blog post by Dr Éoin Clarke sets out £400 billion of cuts. I primarily forgot to mention  the £217 billion spent on wasteful and inefficient "private finance initiatives" in the public sector. Make it £1.3 to 1.5 trillion.

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