The Government is not Solving the Financial Crisis, It is Causing It

April 23, 2013

Beautifully articulate explanation for why the current Tory approach to dealing with the recession is actually making things worse. Partly it is because any measures that radically reduce the size of the public sector will cause unemployment to rise, and rising unemployment will always lead to recession, but also because much of the national debt is in fact private debt and not public debt. With austerity causing unemployment surges and overall wage reductions, debtors are finding it impossible to pay back what they owe faster than the interest mounts.


Scriptonite Daily


The Financial Crisis of 2007/8 was a crisis of private debt.  It only became a crisis of public debt when states around the world made the taxpayer guarantor for this debt and bailed out banks.  However, since then conversation and policy has focussed almost exclusively on public debt, as if this were the source of the crisis.  This has seen devastating impacts on public services, and public perceptions on the welfare state.  In doing so, the government is not solving the financial crisis, but causing it.

Public Debt before and after the Financial Crisis


In the last year before the Financial Crisis, public spending in the UK stood at 41% of GDP and national debt was just 44.1% of GDP. This was consistent with the level of debt and public spending as a proportion of GDP for around the last fifty years.

Running budget deficits has also been a…

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One Response to “The Government is not Solving the Financial Crisis, It is Causing It”

  1. Isha Ink'd Says:

    Does Any person or persons wish to investigate more and maybe take up the lead in instigating this vote appeal

    looking through the magna carter

    ‘Extra Parliamentary Action’ sounds good to me!
    the people do have a choice all we have to do is unite and hold a public vote to dissolve parliament

    The queen is protector of the land and its people, therefore a one person one vote, one of 2 choices, (a) keep the condems in ? or (b) a vote to dissolve parliament,
    As by birth right and nationalisation we are wards of the sovereignty, a majority vote to dissolve parliament has to be recognised by the crown

    A. V. Dicey identified that ultimately “the electorate are politically sovereign,” and Parliament is legally sovereign.[35] Barendt argues that the greater political party discipline in the House of Commons that has evolved since Dicey’s era, and the reduction in checks on governmental power, has led to an excessively powerful government that is not legally constrained by the observance of fundamental rights.[33] A Constitution would impose limits on what Parliament could do. To date, the Parliament of the UK has no limit on its power ”’other than the possibility of extra-parliamentary action (by the people) and of other sovereign states (pursuant to treaties made by Parliament and otherwise)”’.

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