Deficit deceivers will soon replace deficit deniers

By James Mills / @jamesmills1984

Last year we heard the Tory-led government and their supporters describe everyone who disagreed with them as “deficit deniers”, a rather childish coupling of our nation’s finances with that of neo-Nazis who justify or ignore the mass murder of millions of people. But with last month’s announcement of the public sector deficit increasing, it appears those who were branding people “deniers” are themselves proving to be “deceivers”, as they have advocated a policy of cutting spending (such as the Future Jobs Fund and the cancelling of loans such as Sheffield Forgemasters) to cut the deficit, only to see the deficit increase.

Many now believe that this is a sign of worse things to come. As the year progresses we could see an increase in unemployment, lower tax collection and increased welfare spending.

In addition, the axing of schemes like the education maintenance allowance (EMA) and Connextions will also push up youth unemployment. In the short to medium term this will again lead to more economically inactive members of our society reducing spending in our economy and tax revenue collection whilst at the same time increasing more welfare spending, forcing the government to borrow more and leading to an even larger deficit. All this before you take account of the tax increases like VAT which the British Retail Consortium argue will cost 163,000 jobs.

I am not an economic genius – this is just basic undergraduate level text book economics – but what will become apparent in the minds of the commentariat, hopefully our party leadership/media team and the wider public is that those like George Osborne and others who were happy to brand people deniers will find their slogans used again themselves quite easily.

They may find that being described as a deceiver is a harder image to shake and unfortunately that is what they have done to themselves. They were the ones who tried to permeate a myth, for party political reasons, that it was (bad) public spending on services which created the deficit and not the global downturn.

The structural deficit caused by an implosion in the financial and housing markets which were cornerstones of our economy causing a record deficit (a record when one does not include inflation) to arise is just a simple truth that won’t be ignored any longer as the deficit keeps rising and people look for answers.

As this myth finally falls and the cuts sink in and the deficit increases, a return to who was telling the truth to us about how to reduce the deficit will be followed by those who deceived us on how to reduce the deficit hiding their real, ideologically driven plans.

That’s why last year’s “deficit deniers” will be replaced by this year’s “deficit deceivers”.