I want to tell you a story of economics, love, and death. Kind of a Romeo and Juliet parable for the modern age, where the protagonist are societies, not people, who made a kind of suicide pact.
Today, the UK — we’ll get to the US, the world, and the future, but let’s begin here — released some genuinely stunning economic “numbers.” It forecast the economy basically never to grow again, and for incomes not to rise to 2008 levels until 2028. But of course the contradiction is that if the economy will never grow again, then incomes are hardly likely to rise, so we are seeing the death of a modern economy. But it isn’t the first, it is the second: the first death was the USA, which is now something like a post-economic country, nominally rich, but plagued by things like mass school shooting and medical bankruptcies, which don’t even happen really in Delhi or Bangkok.
Two deaths. Are they homicides? Let’s think about it.
In 2007, the greatest financial crisis of of the modern age hit like a tsunami. What was the response from the UK? Well, it was to bail out the banks with public money. Of course, that raised levels of debt. Now, that was no big deal: governments can always print money, and during times of extreme crisis, whether famine or financial, they should. Furthermore, national debt is not the sum of your debt and my debt, and it has no real bearing on our live whatsoever: just as you can happily carry a credit card balance forever, and many people do, so prosperous nations can bear debt, and the strength of a nation is precisely to be able to do so.
But the average person was tricked into believing the very opposite. They came to think, through sophistry masquerading as economics and punditry disguising itself as analysis and sheer propaganda that there was no way out of this mess except to rip the heart out of public life, to pay off the debt incurred by bailing out the banks by cutting public goods and services. Thus public goods — the NHS, BBC, transport, education, and so on — were eviscerated to pay off private debts, and even that is an understatement: the moneys spent went of course to lavish compensation packages and grand accoutrements, not really to “paying off debt”, which is still high, and still doesn’t matter a whit to the average person.
Perma austerity killed the UK economy, by producing perma stagnation. And then came Brexit. Brexit was another misguided, maleducated response: since the UK needed to “save money” to “pay off its debt” the average Brit was again conned into believing that the next great cost, after public goods, was EU membership. “You’ll save millions a week!” the propaganda went. But who was “saving” and what precisely was being “saved?” Nothing at all, as it turns out, because now the economy is well and truly dead, stagnant into forever.
So: this logic, that one must “save money” to “pay off the national debt” or else — who knows? Just like a mafia intimidation tactics, the threat is never really fully stated, is it? — has been proven to be wrong. It has killed the British economy dead.
