George Osborne’s false choice between spending on social security and spending on infrastructure

August 5, 2014

I’d take the argument against the old “we-need-cuts-in-one-area-to-make-money-available-in-another” fallacy a stage further than this. I would go so far as to suggest that if social security spending were truly bad for an economy, and a serious drain on “resources” (why do so many people think that *money* is a resource, by the way? It’s not, it’s a token), no Government would ever have let the Welfare State be introduced in the first place. And the country would have collapsed into permanent economic ruin before about 1965. Instead, the British economy flourished with almost unprecedented consistency from the earliest days of the Welfare State right through to the mid-1970’s, in spite of having to relinquish a resource-rich Empire during the same period. The economy has only reverted to its wild old “boom-‘n’-bust” instability since Margaret Thatcher started dismantling the Welfare State.

alittleecon

From the Telegraph:

“Britain’s welfare budget should be used to fund new transport links in the north which will bring a “real economic return” rather than “trapping people in poverty”, the Chancellor has said.”

The article goes on to quote Osborne as saying:

“I think the real choice in our country is actually spending money on this big economic infrastructure, trans-pennine rail links, Crossrail 2 in London and the like, and spending money on, for example, welfare payments which are not generating a real economic return and at the same time are trapping people in poverty.”

This creates the very strong impression that Osborne really wants to ramp up infrastructure spending, but is being prevented from doing so by people “trapped in poverty”. I’m not entirely sure what the ‘real choice’ means in policy terms, but it’s a completely false choice.

The social security bill is not preventing the…

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