July 2024

A brief lesson in economics for the fools Cameron and Osborne

Dear Mr Cameron and Mr Osborne. I realise neither of you multimillionaires has ever had a proper job and so you are both pretty clueless. So here’s a very simple explanation of economics. When public spending is above 40% of GDP, then it should be reduced to nearer 35%. I think we all agree on that. If the world economy is growing, you can achieve the public spending reduction through smallish cuts and through gradually increasing exports. I hope I haven’t lost you yet. But, and this is a big ‘but’, if the world economy is imploding, then you can’t export your way to the necessary reduction of public spending as a % of GDP, can you? By the way, the answer is ‘NO’. What you have to do to reduce public spending as a % of GDP is to make drastic cuts and create growth by moving the money saved into creating private-sector jobs, which will then generate more tax revenue and reduce public spending on things like benefits for the unemployed. Hopefully Mr Cameron and Mr Osborne and their well-paid but equally clueless advisers can understand this.

The challenge is to make cuts that produce cash immediately to be invested in job creation rather than cuts that will only give returns in a few years. There is only one way to do this – put all public-sector managerial and administrative staff on a 4-day week, so they just work Mondays to Thursdays and have Friday, Saturday and Sunday off. I hardly think any of us would be affected if all Whitehall departments were closed for three days at the weekend or if all hospital and council executives weren’t at work on Fridays. That would save about £100m a week – £5bn a year – in real cash, immediately. You then take this £100m a week (£5bn a year) and use it for infrastructure projects – building homes, schools, roads etc. Allowing for raw material costs, this would be enough to pay for about 100,000 unemployed people to get jobs. That would reduce benefit payments by over £10m a week (£500m a year). This would also reduce the social costs of unemployment (crime, hopelessness, family break-up, illness, depression etc) and produce something of value – roads, schools, houses and so on – instead of more worthless paperwork from unnecessary, underworked, overpaid bureaucrats. Thus the real benefits for society would be much more than the £500m a year.

This is how you reduce public spending while generating growth. There is no other way. So, pull your fingers out and do this – you’re paid enough, now do something to earn your salary, pensions and perks.

Comments are closed.