David Davies MP at The Commentator tries to explain it in words so simple that even Krugman, Obama, Hollande and the BBC/Guardianistas might be able to understand…
The ‘plan for growth’ is actually a euphemism for borrowing more money than we already are. Sound familiar?
The theory goes that the government borrows money to spend on a big project, like building a motorway. This creates lots of jobs in construction, and afterwards even more jobs are created.
We spend money to make money.
This sounds too good to be true because it is.
‘Growth plans’ have to generate enough money to pay back the sum borrowed, plus interest.
The government is already spending around £45 billion a year on interest payments alone – this is more than the defence budget.
This is actually a low figure, because those lending to us have confidence that we will pay the money back.
Countries that want to carry on spending money they don’t have (like Greece) can no longer borrow money easily and therefore need to be bailed out.
We don’t want to go there.
So, in order to ensure that banks and other countries retain their confidence in the UK’s willingness to sort out its deficit, this means sticking to the plan to spend what we earn.
I think we have learnt enough from the past decade to understand that a ‘growth plan’ is a thinly veiled call for ‘increased spending.’
Of course there is always the money tree……
