Lowering taxes is counterproductive, though. The problem is sharing the burden with the wealthier. At some point, you can't really get something for nothing and we have to accept that if we want first-world services and infrastructure, we have to pay for them. And paying for them through taxes is way more efficient than just letting private companies extract their benefits from tolls and such.
I agree with this - I was making the point that austerity, by the terms of its own argument, hasn't worked. Reducing public spending has demonstrably not reduced our debt burden even before the pandemic, and so therefore I would suggest we abandon it.
Definitely, it was a resounding failure of the modern Neo-liberal ideas. What worries me though is the cakeist populists who are feeding on resentment and who are in power or close to it in several European countries (including the UK). There will need to be a tax increase, probably not for most people, but in terms of tax revenues.
The problem is that the effective taxation rate is unbalanced. Lowest income groups and new graduates are paying more than the highest income ones! Lowering tax on the majority of people need not lower tax so significantly if paired with higher tax rates at the top. Or so my understanding goes.
If you completely ignore the context of a global financial crisis in 2008 and pandemic in 2020, I suppose you might think austerity has been unsuccessful.
I'm genuinely curious to the reasoning behind austerity - I confess to not having any academic qualifications in economics but it does seem to me that deliberately removing services from the poorer sections of society is going to introduce more friction to the system, which will lead to poorer outcomes in general. The fact that our public debt continued to soar, even before the pandemic, seems to me to suggest that even on its own terms it wasn't a winning argument.
Do you have any sources that make the argument for austerity? This is a genuine question - as I say I have no formal background in the subject but from what I've managed to find I have found little in the way of convinvcing arguments.
Austerity is not a difficult policy to understand.
If your personal debts had grown exponentially over the past year, and your income showed no signs of exceeding your outgoings, would you not make some effort to reduce your outgoings?
Ah yes, the "maxing out the country's credit card" argument. The national debt is owed in £'s, which the government can create and destroy at will, and much of it is one arm of the government owing another arm of the government. It's nothing like personal debt.
Yes of course, the UK could simply print enough money to repay all its debts and that wouldn’t have any harmful or damaging effects on its economy whatsoever…
It's much too reductive a framing, IMO. Public sector spending is not, majorly, an "outgoing" of "the UK" in any reasonably comparable way to an individual's spend - rather, public sector money generally funds services within the UK which employ individuals who a) pay income taxes directly b) spend their income in other parts of the economy, where VAT/corporation tax/etc feed back to HMRC, and companies profit and grow.
It's really nothing like an "I've spent £5 on a beer and now that fiver is gone forever" outgoing, in scale or effect.
There's an eye watering level of wealth at the top. Merely shifting tax burden a bit on to high end property would allow revenue neutral increased spending and lower taxes on the middle and working class.
It might help keep a lid on that crisis of unaffordable housing as well that tends to follow when an excess of £££ is sloshing around.
Perhaps we could do this with an NI increase that costs higher earners more, raising the NI threshold to benefit those on lower incomes, reducing fuel duty, and providing council tax rebates for those living in lower value properties?
