Is the high level of Government debt a justification for austerity?

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In the piece posted below, Henry Stewart exposes Osborne’s sleight of hand by using the high level of government debt to justify his cuts – the debt that has grown under Osborne’s stewardship from £960 billion in April 2010, just before the coalition government was elected, to £1.5 trillion five years later.  Nevertheless…

UK government interest payments at lowest since war

By Henry Stewart : @happyhenry

Government debt was, in 2010 and 2015, a key element in the general election. The high level of debt is the justification for austerity. Politicians on the right and left have explained that the high cost of servicing the debt prevent spending on health, education and other areas.

The natural assumption is that this has been such a key issue in 2010 and 2015 because the cost of interest payments on the debts were particular high in those years. An analysis of government statistics reveals that the opposite is the case. The cost of interest payments were, proportionately, at their lowest levels since the war in the years 2010 and 2015.

UK Interest Payments lowest as % of government spending

There are two ways of comparing the cost of interest payments: as a percentage of overall government spending or a percentage of UK GDP. Interest payments were 4.3% of government spending in 2010 and 4.9% in 2015. As the graph below shows, the level was higher in all other post-war years. At the end of the previous Conservative government, in 1997, interest payments represented 9.7% of government spending.

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UK Interest payments lowest as % of GDP

UK interest payments are also at their lowest in terms of proportion of GDP. In 2010 the figure was a post-war low of 1.7%. In 2015 the figure was 1.8%, equal lowest with the years 2003 and 2004. In this case the figure at the end of the last Conservative government in 1997 was 3.3%

A key reason for the low cost of interest payments is clearly the low interest rates at which money can currently be borrowed. However, as many economists have pointed out, the low interest rates make this the best time since the war to invest in the public infrastructure rather than cut back.

And if the main problem with debt is the cost of servicing it, why has this only become an issue when that cost is at a post-war low?

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These figures are taken directly from the PSF (Public Sector Finances) aggregates databank: http://budgetresponsibility.independent.gov.uk/data/

Contact Details Henry Stewart can be contacted on henry@happy.co.uk,

or on Twitter: @happyhenry

Editor’s note:

William Keegan wrote in the Guardian, October 2015:

‘George Osborne is what is known in the trade as a “chancer”. Chancers often get found out. William Hill has made the chancellor hot favourite to succeed David Cameron. We shall see. The wider implications of his unnecessary policy of austerity are gradually being brought home to the middle classes and all those middle-England voters whom the new leaders of the Labour party are accused of ignoring. The “cuts” are affecting surgeons, GP surgeries, local authority social services for the old and the infirm, and reaching into many other corners of everyday life.’

 

 

John McDonnell at The Peoples Assembly Against Austerity

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Targets should be to tackle homelessness, food banks, joblessness, withdrawal of social care, climate change not GDP which just measures how much wealth has moved to the top.

 

John McDonnell MP Shadow Chancellor The Peoples Assembly Against Austerity 05 12 15

Britain in Syria: a gift to ISIS

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Britain in Syria: a gift to ISIS

Paul Rogers 3 December 2015 openDemocracy

 

The lower house of the British parliament voted late on 2 December to extend the country’s air war to Syria.  The United Kingdom will thus become the fourth western state to be involved along with France and Australia, though the United States remains the dominant force in the whole operation.  British aircraft will bring a little bit extra to the raids but the political significance of their deployment is much greater than the military one.  Now that Saudi Arabia, Jordan, Bahrain and the UAE have all stopped their own airstrikes on Syria, the anti-ISIS campaign has become almost entirely a western war.

Overall, this is an element largely missed by the western media.  But it will be used relentlessly by ISIS propagandists as they portray this as a “crusader war” against Islam.

That depiction includes Russia’s increasing role.  Until recently, Russian forces were operating airstrikes from a single airbase near Latakia on Syria’s Mediterranean coast, together with two smaller forward operating bases (FOBs) dependent partly on helicopter supply.  Russia is now in the process of a rapid expansion that will come close to doubling its involvement, including an enlarged airbase at Shayrat airport near Homs, and two more FOBs.

Moscow also seeks to ensure protection for its planes in light of Turkey’s destruction of one of its jets.  It has begun to install the long-range S-400 ground-launched anti-aircraft missile in Latakia, and there may well be deployments to Shayrat as well.  Most of this military activity is directed at supporting Bashar al-Assad’s regime, and its planes and helicopters hardly face any threat from what remains of the Syria airforce.  Thus the new missile placement must be seen as a signal to states such as Turkey and Israel not to threaten Russian forces.  The risk of miscalculation on all sides is a recipe for increased tension.

This is the complex and disorganised theatre of war that the UK is now moving into.  But it is also a war that is accelerating in other directions.  All the indications from Washington are that the administration is intent on expanding the air war in both Syria and Iraq.  Stars and Stripes, the newspaper of the United States military, says the US “will adjust its tactics and risk more civilian casualties when launching air strikes against high-value targets in Syria and Iraq as part of an effort to increase pressure on Islamic State militants.”  More civilians will be killed but, as the chair of the US joint chiefs of staff, General Joseph Dunford, put it so plainly this week:  “Our threshold for collateral damage increases with the value of the target”.

A clear element of “mission creep” is revealed by the fact that US special forces will operate in greater numbers and at higher levels both in Syria and Iraq, engaging particularly in search-and-destroy operations against ISIS leadership elements.  Almost certainly, this reflects the Pentagon’s determination that – in the absence of progress elsewhere – it is time to relearnthe lessons of the JSOC’s activities in Iraq a decade ago, when Task Force 145 took the war to Al-Qaida in Iraq (AQI).  The group was then directed by its Jordanian leader, Abu Musab al-Zarqawi.

This history is worth remembering, since so many of the paramilitary survivors of that bitter, brutal and largely unreported war have gone on to make up significant parts of the hard-core, middle-ranking ISIS paramilitaries that are ensuring the survival of the movement.

A growing network

There are two further developments to consider in a war that, it is often said, is going badly for ISIS.  The first is that ISIS in Syria, let alone Iraq, is proving far more robust and able to organise the towns and cities it now controls.  It is aided by an apparently unending supply of technocrats from the Iraqi Ba’athist era who are able to handle the details.

The ISIS-run areas are responsible for managing all routine matters such as water supplies, policing, sewage disposal, transport, schools, taxation, control of roads, street cleaning and commercial permits.  This is little reported in the west, yet though the ultimate rule may be brutal, routine living conditions can actually be safer in and around Raqqa than in chaotic and violent districts nearby that ISIS does not control.  So much so that there are actually some refugee flows into ISIS-controlled area since they are seen as safer than much of the rest of Syria.

The second, and again almost entirely missed, feature of ISIS behaviour is the considerable attention it is now paying to establishing a second proto-caliphate in the Libyan port city of Sirte.  There, it has a city and many miles of coast under its control, and is reported to be gaining access to oil resources as well.   A new United Nations report says that ISIS has moved 2,000-3,000 paramilitary fighters to join the existing ISIS-linked elements in Sirte.  This opens the possibility of direct links to the north across the Mediterranean towards Italy, and south across the Sahara towards countries in the Sahel such as Mali and Niger.

In short, ISIS may be under serious pressure, but it shows no signs of facing defeat in Syria and Iraq and is actually expanding in Libya.  The UK parliament’s decision to join the bombing of ISIS in Syria may have considerable political meaning in Britain, but in the wider scheme of things it is not much more than a sideshow.

A new front

Even so, it is likely to become progressively more controversial within the UK, an element that may well be highlighted by the nature of the very first attacks carried out within hours of the end of the parliamentary debate.  Four RAF Tornados flew from Akrotiri in Cyprus and attacked six targets in an oilfield in eastern Syria with Paveway IV bombs, an attack that was intended to damage ISIS oil production.

Yet it is highly unlikely that the people actually operating that oilfield would have been dedicated ISIS paramilitaries and far more likely that they would have been ordinary workers.  Two days ago the Pentagon announced that US warplanes had destroyed over a hundred oil tankers, but who was driving them?  Most likely they were ordinary contract drivers for transport companies, albeit under ISIS control.

In short, trying to destroy ISIS from the air will inevitably mean many civilian casualties, but the UK, French, US and other governments will hardly want to focus on that: as General Tommy Franks of the US army said early in the Iraq war, “we don’t do body counts”.

No indeed, “we” don’t, but “they” do.  Indeed it is certain that ISIS propagandists will already be at work publicising the backgrounds of people who got killed by the RAF attacks, probably with photos of their families and plenty of other personal details.  That is the nature of the war that the House of Commons has approved.

 

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Constituent’s Letter to Tory MP about Bombing Syria

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Dear John Whittingdale,

I understand that you voted with the Government yesterday to bomb Syria.  Following our meeting two weeks ago when we presented you the petition about tax credits you mentioned amongst other things that you didn’t like John Maynard Keynes.  May I draw your attention to a few words written today by Michael Rosen.

Vote for war.
We’ve got to keep this economy going somehow.
Keynes wasn’t right.
But Keynes for killing makes sense.
Pump prime the arms economy, stimulated growth.
You see, everything connects.
When they don’t there’s trouble.
And when there’s trouble we pour oil on troubled waters.
Oil? Who mentioned oil?
Not me.
You must be thinking of someone else.
Thank you.
Bombs away!
Chin chin.

I think it says it all.  Keynes to suit a Tory agenda for war.  It seems to me that the West is nothing more than the military industrial complex.  It exists only to feed the war machine not for what is right but for money.  Arms dealers and politicians create the enemy and feed the enemy whilst we are treated to never- ending rounds of duplicity and deception and you spout sanctimonious words about freedom, democracy and keeping us secure.

All the while you threaten us by keeping us fearful for ourselves and our families.  You vote to kill innocent people in a foreign land where you won’t have to face the terror, blood and destruction which will result.  Lives of people just like you and me.  We rarely hear (apart from a few brave journalists who speak out) why terrorist attacks on the West occur – the elephant in the room is studiously ignored in a deliberate fashion.  And all the while Afghanistan, Iraq and Libya are still in pieces as a result of Western interference.

When Secretary of State Kerry called Assad’s gassing of nearly 500 children a moral obscenity he had obviously forgotten Madeleine Albright’s assertion that the death of 500,000 children due to sanctions in Iraq were ‘worth it’.  Surely this shows that the so called moral compass of our politicians only applies when it suits their agenda.  The hypocrisy of our leaders is pathetic and deplorable.

So finally to remind you, last week at the Spending Review George Osborne said there was no money.  We have to tighten our belts, cut services, destroy people’s lives and all to satisfy an evil ideology not based on any sort of necessity.  This week suddenly there’s plenty of money for war equally to destroy people’s lives but in the most horrific way possible and with complete disregard for the victims.  Collateral damage I believe you politicians call it.  I can’t even bear to think about the terror that will be caused by our actions let alone the consequences for the future.  The past 14 years of spurious wars are testament to the stupidity of our leaders and an inability to learn any lessons at all.  Not that you want to learn the lesson, it would seem.

So do tell me Mr Whittingdale where is the money coming from if we didn’t have any last week?  I’m afraid I believe that these are political choices made by wicked men for the benefit of a few rich people who are determined to have it all at the expense of us all.  For someone who calls himself an economist you clearly either choose not to understand how our economy really works or you know but prefer to indulge in duplicity rather than the truth.

Yours sincerely,
Prue Plumridge

 

 

Arms manufacturers stocks soar after UK decision to join Syria bombing

Andrew Smith of Campaign Against Arms Trade told CommonSpace: “Unfortunately, where most of us see war and destruction the arms companies see a business opportunity. It is conflict and military intervention that fuel arms sales, and companies like BAE are only too happy to cash in from it. These companies don’t care who uses their weapons or the damage they cause, the only thing they care about is profit.”

The arms sales of the world’s four biggest corporations alone are equal to more than $100bn for 2013.