Thanks to Paul’s contribution (see earlier post on S&P), I was linked to a post on ThoughCowardsFlinch, a Blog that, taking its title from a lyric of The Red Flag, might be supposed to be left of centre. Paul argues with Barney about whether public spending needs to be cut. Quite unexpectedly, I come down on the side of Barney, indicating that yes, it will, and more importantly that those ever giving fountains, the “Scrap all of Defence” and “Tax the Rich” cannot close the ENTIRE gap:
Just doing the numbers: the richest 10% – which includes a fair number of people who might think they are quite Middle – earned about £240bn in 2006-7, and already pay about £75bn of that in taxes. They might – so unreasonably – think they are paying enough – the selfish so-and-sos – and therefore I suspect that getting more than another £25bn from them in some form – an increased contribution of 33% – would be somewhat harder than extracting the intestinal tract from a living elephant in a bad mood.
This no doubt puts me in the camp of the Flinching Cowards. So be it. As someone whose first major foray into the national economics debate is associated with an unusually phlegmatic attitude to debt, this is unusual for me.
But I am very curious about Paul’s immediate answer: that the national debt is in some way a fiction. Like Harry Potter? I suspect that I have to read this rather learned looking post to find out the answer: