Sunday, 27 June 2010

Can/could Keynesian Growth Succeed?

Last week's budget brought out condemnation from The Independent and The Times. How, they said, can you apply such a swingeing budget and expect any stimulus for growth to take hold? It's absurd, they cried, there must be stimulus for growth ...

Well, if the world were to be ever-capable of sustaining never-ending growth then I would be the first to agree with the logic of those newspapers. The problem is that the world is not capable of sustaining continuous demands on its resources, therefore the budget - more by a miracle than human design I strongly suspect - has bent to the laws of sustainability.

The major failure of the new government has been that they have not said that we need to address our view of life in quite a different way - that we individually need (in any case) to tighten our purse strings and also place a ceiling on our desires.

This government is doing some right things, but in the wrong way. It's not being transparent about the real decisions that have to be made - which is about the kind of world we are going to leave our children. The ordinary public is simply going to be left with a feeling that they are being victimised - that the rich can continue to live comfortably while the poor and poorer off have to make the real sacrifices.

It's time now for government to engage ... properly. The sustainability issue is the major issue facing this country ... and the whole world.