Antidote to Osborne’s fairytale economics


Panel of leading economists discuss and debate the true state of the economy and the lies underpinning the Government’s austerity programme.

The panel includes:
Owen Jones, Journalist
James Meadway, Senior Economist, New Economics Foundation
Ann Pettifor, Prime Economics
Micheal Burke, Economist
Chaired by:
Christine Blower, General Secretary, NUT

This economic briefing was recorded just a few days ahead of George Osborne’s Autumn Statement… but none of the panellists came close to anticipating the level of hubris, triumphalism and double-dealing that accompanied the Osborne Autumn Statement.  It was a truly breath-taking performance!

Find out the real effects and intent of austerity that George Osborne and the Government don’t want you to know…


The People’s Assembly Against Austerity – Economic Briefing – 27.11.14

Why do politicians tell us Debt/Deficit myths which they must know to be untrue?


The New Economic Perspectives’ video clip on the Government budget, Deficits and Debt presented below (produced for educational purposes), debunks the myths that politicians tell their populations to justify ‘austerity’.  In the case of the clip, it starts with 3 full minutes of American politicians misinforming the electorate.  An identical montage aimed at the UK electorate could undoubtably just feature George Osborne’s utterances from his forthcoming Autumn statement scheduled for this Thursday (5th December 2013).

However, the reality is that all economists know that the deficit and debt mythologies are not true and ‘have long known that the idea of balancing budgets over the cycle is a bit like a fairy story we tell to frighten the kids’.  Economists, and Central bankers like Mervyn King, Ben Bernanke, Alan Greenspan, all know that:

The UK government can never ‘run out’ of money;

The UK government can never be forced to default;

The UK government can never be forced to miss a payment;

The UK government is never subject to the whim of ‘bond vigilantes’.

In fact, the St Louis Federal Reserve, from the heart of Western capitalism in the US confirms the same for the US dollar (and any other nation that creates its own currency) :

‘As sole manufacturers of dollars whose debt is denominated in the dollar, the US government can never become insolvent ie. unable to pay its bills.  In this sense, the government is not dependent on credit markets to remain operational.  Moreover, there will always be a market for US government debt at home because the US government has the only means of creating risk-free dollar-denominated assets.’

Paul Samuelson, ‘father of modern economics’ and Nobel Prize winner, suggested the reason for perpetuating the mythologies in a 1995 interview:

“I think there is an element of truth in the view that the superstition that the budget must be balanced at all times [is necessary]. Once it is debunked [that] takes away one of the bulwarks that every society must have against expenditure out of control. There must be discipline in the allocation of resources or you will have anarchistic chaos and inefficiency. And one of the functions of old fashioned religion was to scare people by sometimes what might be regarded as myths into behaving in a way that the long-run civilized life requires. We have taken away a belief in the intrinsic necessity of balancing the budget if not in every year, [then] in every short period of time. If Prime Minister Gladstone came back to life he would say ‘uh, oh what you have done’ and James Buchanan argues in those terms. I have to say that I see merit in that view.”

It may be that politicians fear the ‘anarchic’ demands of the electorate were the public to understand that the UK economy is not like a household and can never be bankrupt.  However, these distortions of reality have been carried to a new pitch by George Osborne and the Coalition government:

The scale of the Coalition government’s intended austerity measures are on a scale never seen in modern Britain. What is planned here will dwarf anything that was undertaken by Thatcher in the 1980s. There is already massive unemployment in the public sector….Massive unemployment and lower wages mean lower tax receipts, and even bigger budget deficits and debt loads…It is now clear that the austerity policy in the UK is not a matter of economic necessity but of political choice… It is obvious that the cuts of this scale are about much more than just deficit reduction… The cuts are part of an agenda to transfer services from the public sector to the private sector. The pretence of ‘there is no alternative’ is a means for the Conservative project to radically transform the state.

It would be just as well to remember this week, when listening to George Osborne and Danny Alexander, that Keynes said:

’Capitalism is the extraordinary belief that the nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all.’


New Economic Perspectives on the Government Budget, Deficits, and Debt

Published on Nov 28, 2013

The video clip features the following speakers, in order of appearance:

Professor, Economics, University of Missouri-Kansas City
Senior Scholar, Levy Economics Institute
Author, Understanding Modern Money, Modern Money Theory

Professor, Economics, and Chair of the Department of Economics, University of Missouri-Kansas City

President, financial services firm Valance Co. Inc.
Author, Soft Currency Economics, The Seven Deadly Innocent Frauds of Economic Policy

For More Information:

University of Missouiti-Kansas City, Economics Blog:
New Economic Perspectives

The Modern Money Network

Other posts from Think left:

George Osborne says we’re running out of money ..

The fundamental deceit of ‘There’s No Money Left’

What will they do with all those Mobility Scooters?

Welfare reform and Remploy Closures: The Double Edged Sword

What will they do with all those Mobility Scooters?

This government is an absolute disgrace – a non stop onslaught on the vulnerable. In the Autumn statement, benefits are limited to a 1% increase, effectively a cut, given an inflation rate of 2.8%, while simultaneously cutting corporation tax by 1% so the rich benefit. Continuing the deception about the structural deficit, Osborne, seeks to marginalise , stigmatise (1) and further exclude people who are unemployed, many of them suffering illness or facing life with a disability. Indeed, 60% of claimants are in work. This includes people with disabilities, who, with support, wish to take a full part in society. Nothing this government does makes any sense. But to say cuts in benefits are intended to encourage people to work is ludicrous if those are the very benefits which make work a possibility. If Osborne feels people need an incentive to work, why not ensure that there are jobs available for them, and raise pay? Osborne’s solution is to axe public sector jobs and cut pay in real terms. (2)

The Treasury seeks to take back around £2bn (3) (4) cutting the The Disability Living Allowance next year making it much more difficult for those with disabilities to remain independent. Next year, when the DLA is to be replaced by PIP. Some 280,000 people, those in most need will lose support. The allowance pays the extra costs of disability, in or out of work, for personal help, taxis or cars. The cuts will be shocking: 90,000 motability cars and scooters will be repossessed. Many people will therefore face needing to claim unemployment benefit because they are prevented from work.

Remploy Factory Springburn - -...

Remploy Factory Springburn – – 1190260 (Photo credit: Wikipedia)

Hundreds more disabled workers at Remploy factories are at risk of losing their jobs under fresh closure plans, the government announced today. 
A further 875 employees, including 682 disabled people, have been told they face compulsory redundancy. 
Ministers announced earlier this year that a number of Remploy factories would close, arguing that the budget for disabled employment services could be spent more effectively. 
Thirty-four factories have ceased operations since then and are in the process of closing, but the future of a further 18 sites remained unclear. 
Some of the factories have the potential to move out of government-funded support, but others are set to close, ministers said today.

Shadow work and pensions secretary Liam Byrne called the move a “shameful act from a contemptuous government”. Phil Davies of the GMB union said: “This is devastating news for the disabled workers in Remploy and gives the lie to the chancellor’s claim in his autumn statement yesterday that the vulnerable would be taken care of by the government.”

Remploy Norwich picket front entrance this morning

Remploy Norwich picket front entrance this morning (Photo credit: Roger Blackwell)

Around the UK:

  • Workers at risk of redundancy are in 15 Remploy factories, with three automotive businesses in Coventry, Birmingham and Derby not included
  • The automotive textiles operation at Huddersfield is “not commercially viable” and the factory is proposed for closure
  • Staff at the furniture business based in Neath, Sheffield and Blackburn, the marine textiles business, based at Leven and Cowdenbeath and the CCTV business are at risk of redundancy if a buyer cannot be found
  • Three other Remploy businesses will be closed because they are not commercially viable and do not have any realistic prospect of being sold as going concerns – E-Cycle based at Porth and Heywood, front-line textiles based at Dundee, Stirling and Clydebank and packaging based at Norwich, Portsmouth, Burnley and Sunderland (BBC) (5)

On our TV screens we see countless adverts from charities tugging at heart-strings (or guilty consciences) interspersed by News items stigmatising anyone who needs the support of others. Illness and disability can happen to any of us. It could prevent us working. Working people make contributions – National Insurance to protect them at times of need. What a shock it will be to find the door slammed shut.

Think Left calls for vocal action from MPs, and has responded to Labour’s recent document, Making Rights for the Disabled a Reality (6)

A review of the shocking process of The Work Capability Assessment was recently published in a People’s Review. (7)

“It is not enough for Government to say that the genuine claimant has nothing to fear. In too many cases, genuine claimants are not scoring any points in their initial assessment. There is something fundamentally wrong with the system and the contract that Atos is delivering. When the British Medical Association votes at its conference to say that the work capability assessment is not fit for purpose there is something wrong with the system.


When up to 40% of appeals are successful and there is no penalty for the company carrying out the assessments, there is something wrong with the contract. When there is no incentive for assessors to get the assessment correct first time, there is something wrong with the contract.

It is time for the Government to act, because there is something fundamentally wrong with the whole system.”

Dame Anne Begg MP, Chair of the Work & Pensions Committee – 4 September 2012

This government, and their policies are based on lies. The policies are ideological by design, and justified by the need to cut the structural deficit, which has been exposed as a myth (8), yet is still reported as fact by the media. Meanwhile, David Cameron is making up his own statistics, and has been rebuked by a watchdog for claiming cuts have not been made to NHS budgets, when ONS statistics say otherwise. (9) He then continues to make the same lie during PMQs. On Education, Gove continues to privatise, and claims improvements without evidence, when his own research shows otherwise, policies based on deception. (10)

If any one of us stood in a court of law and lied, we would be in contempt of court. Yet in the very chamber where laws are made, we have been constantly subjected to deception by those who should be serving and protecting us – that is, after all the purpose of a government, isn’t it?

Make no mistake, deaths will directly result from government policies. Should we sit quietly awaiting tragedy? Why are Liberal Democrats allowing this government to continue (11) with policies to pass laws even more extreme than Thatcher? Isn’t it time for a vote of no confidence in this government? I think so.

Avaaz Petition for No Confidence vote. ( to be sent to Ed Miliband)

  1. CLASS: The Social State: Exploding the Scrounger Myth
  2. George Osborne goes for growth (by firing 10,000 civil servants)
  3. Disability Benefits to be Slashed
  4. Guardian: Paralympians Disabled Benefits Cut
  5. BBC News Remploy Factory Closures
  6. Making Rights for the Disabled a Reality (Think Left’s Response)
  7. People’s Review of Work Capabilty Assessment : pdf
  8. Osborne and Cameron’s Big Deficit Myth, Think Left
  9. Sky News: Government rebuked over claims about NHS spending
  10. Gove’s Selective Truth, Think Left
  11. Arguments that every Liberal Democrat would do well to hear, Think Left
  12. Disabled people ‘should work for less’, says Tory MP
  13. Community Care More Pain as Osborne cuts an extra £44 m