Let's be clear: the notion that there is no method to reduce budget and structural deficits, other than in cuts to social spending and privatisation schemes in public services, is a straightforward untruth. It is an obscuring ideologically-driven narrative construction. It is a lie. The Education Maintenance Allowance that Ed Miliband casually dismisses the restoration of, for example, assured access to higher education to many thousands of young people, who have been forced to abandon those basic opportunities due to its abolition by David Cameron's government.
It was somewhat bizarre to listen to the speech given by President Bill Clinton—whose presidency was the most recent in U.S. history to supply a budget surplus through its increased taxation on the wealthy and investment in education, and scientific, technological and infrastructural development—to use terminology such as "the mass we inherited" in reference to the financial catastrophe parlayed onto American society by the deregulatory and supply-side economic policies of the George W. Bush administration and the Federal Reserve of Ayn Rand disciple Alan Greenspan.
The ironic truth is that when the Tories discuss, in their extremely condescending and monotonous way, an "economic mess" they inherited, they aren't technically inaccurate. Just as the United States has been inflicted with the failure and disaster caused by an Objectivist-led Fed and the policies which began with the Reagan Administration, as has Britain by the neoliberal Thatcherite ideology which was first institutionalised in the mid-1980s by its General Pinochet-supporting namesake, and continued by the railway-privatising and single mother-attacking government of John Major, and the neoliberal New Labour project of Tony Blair and Gordon Brown.
The basic agenda of the current government is to make wider society: public sector workers, the National Health Service, education, universities, poor, elderly, vulnerable and disabled people, students, children, and the arts and sciences, pay for the cost of the economic crisis that none of them caused. As well as to supply generous tax cuts and subsidies to the wealthy and multinational corporations.
The frustrating reality which Ed Miliband and Balls seem to be oblivious to is the fact that the Labour Party opposition (which is tremendously lacking in its presupposition as an opposing ideological force against the Tory-Liberal Democrat coalition) could have a far stronger and bolder line on deficit reduction, completely synonymous with an opposition to unjust austerity, which fulfills only ideological Tory psychopathology and nepotistic vested interests mutually.
Outlined is some basic statistics:
- The accumulated estimate for cost the Bank of England's liquidation (bailouts) of Britain's banking system in 2008 is £1.5 trillion. This is £523 billion more than the structural deficit which was estimated as £977 billion when George Osborne began to engage in his austerity drive against public services in 2010. It is known that the banking system's wealth has increased in the years following the financial crisis it caused, while thousands of families and children have been plunged into poverty by the ensuing recession and austerity justified to pay down a deficit caused by the said £1.5 trillion bailout.
- Government spending at 2009-2010 levels preceding said public spending cuts was £155 billion. (Though this includes spending such as the number of nuclear weapons maintained, subsidies for marketisation of public services, and state surveillance programs which I would advocate cutting). The estimated collectivised cost of revenue lost by tax evasion and avoidance schemes and loopholes manipulated by select groupings of multinational corporations and wealthy individuals is known to be £95 billion every year. This is compared to the £81 billion of cuts to public services in George Osborne's original 2010 'spending review'.
- According to Andy Haldane, Executive Director of Financial Stability at the Bank of England, £100 billion of subsidy is granted by the UK government to give free insurance to the banks who received bailout funds. What implicit need do financial institutions with multi-trillions in combined assets have for this subsidy, when compared to, for example, poor children or severely disabled people victim to the same government's budget cuts in the welfare system, whose benefit payments are absolutely marginal in cost when compared to this subsidy?
- Conclusively: 1) ensuring that the banks who received percentages of their £1.5 trillion in bailout funds easily compensate their obligations to taxpayers and the treasury, 2) tackling evasion and avoidance of fair taxation by the wealthiest in society, and 3) ending £100 billion a year of exorbitant state subsidies to investment bankers and hedge-fund managers, would leave Britain with a £523 billion structural surplus, and a possible maximum budget surplus of £64 billion per year with government spending hypothetically restored to the whole of 2009 levels (though I would cut nuclear weapons and state surveillance programs), before the beginning of the Cameron coalition government's ideologically-driven austerity agenda.
If the Labour leadership insists on ideological triangulation, then it ought to understand that it can completely break through the deception of the ideologically-driven austerity narrative: that deficit reduction and neoliberal divestment and privatisation are synonymous. Instead standing wholly against the Tory agenda, in mind of the fact of there is an alternative to it, not morally depraved or regressing 21st century society in its implicit failure.