Sunday, June 23, 2013

The Alternative to Austerity (in 132 words)

I went to the People's Assembly in London yesterday.

It is very clear indeed that Osborne's austerity is not only doomed as a cure for the deficit and the recession, but is also totally unacceptable because of its effects on people.

A head of steam is building up over austerity that is likely to lead to demonstrations, strikes and civil disobedience. It is not impossible that, in time and given unwise and repressive policing, disaffection  caused by austerity could lead to fatalities, civil disorder, attempts at revolution, and a coup.

In order to avoid this, we need a mass non-violent movement, rallying under the flag of Democracy, Equality, Sustainability,  that can convince the nation and its rulers that there is a sensible alternative to austerity.

In order for this to work, we need an alternative to austerity that everyone can understand.

So here goes:

  1. There is a real budget deficit (gap between Government's income and spending) problem that needs to be addressed.
  2. Osborne's austerity approach, cutting spending, is failing because it slows up economic activity and reduces income from taxation.
  3. The alternative is for Government to invest in the real economy, mainly in energy conservation, house-building and renewable energy industries. This will save money, stimulate economic activity, and raise taxes.
  4. If borrowing for this investment is deemed unacceptable, Government can obtain the money
    (a) by taxing rich individuals and corporations, and
    (b)create the necessary money  through Quantitative Easing.
  5. In addition, the Green Wage Subsidy can bring about full employment, stimulate economic activity, raise morale, nudge the economy in a green direction, prepare the ground for Citizens Income, and bring in about £10 billion/y into the UK economy - all at trivial cost of about £35 million a year.  

So there we have it in a nutshell. The alternative to Osborne's austerity argument.

Obviously this is only the core of a far more complex argument, but I put it out at this length in order for it to be available to the general public. 

Compass has developed the argument at more length in its Plan B+, and Positive Money UK covers the QE aspect.

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