The Fiscal Incontinence of New Labour

The foundations of Britain’s towering edifice of debt were laid by the fiscal incontinence of New Labour. The last time a British Chancellor delivered a balanced budget was 2001, the year of Tony Blair’s second general election victory. Brown’s core structural deficit long preceded the financial crisis that he likes to incant “began in America”. With our state coffers now bare, tax revenues are starting to collapse as unemployment shoots up and welfare payments balloons. His unprecedented fiscal and monetary stimulus last year merely blurred reality, deferring discipline to the bond market and beyond the looming election. Like the first Labour government in 1931 Brown is still hoping to buy votes with “hopes of cheaply won benefits”. Like Ramsay MacDonald, he will lose because he has “demanded too little and offered too much”.

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