Behind Blue Eyes

As seen on the BBC, Audit Commission chief Steve Bundred writes

“Don’t believe the shroud-wavers who tell you grannies will die and children will starve if spending is cut. They won’t. Cuts are inevitable and perfectly manageable”

Furthermore, Alistair Darling is starting to realise that the people who generate the cash for the state might get a bit peeved if they watch public-sector paper-shufflers getting big pay rises while the private sector collapses:

Chancellor Alistair Darling said public sector pay had to be “fair” to private sector employees as well.

Thank goodness. Now all we need is a government who will actually start sorting this mess out instead of making it worse. If it was up to me, public spending would be cut by about 80%. Why? Let me hand you over to The Devil:

…when it is the state that helps the poor, the poor are infantilised and become unable—and unwilling—to help themselves. It leads to people seeing a homeless person on the street and instead of thinking “there’s a fellow human being in a bad way—how can I help?” they get to thinking, “why hasn’t the state sorted that out yet? I must lobby for more taxes/more interference” (or, “I pay my taxes: the state should clear my road”).

… [T]he state is not the only engine of social help. In the late 1800s and early 1900s, people got together to create “the Friendly Societies”: these were a form of insurance. You would pay in a few pennies every week and the Friendly Societies would invest the money of everyone—then, if you got ill, or you lost your job, the Friendly Society would help out. This is an example of the very best in voluntary collectivism (which, of course, libertarians are very big fans of. Because collectivism—people helping other people—is good when it is voluntary: it helps to bind societies together in a way that the state does not, e.g. see 2 above). The burgeoning Friendly Societies were, of course, absolutely stuffed when the government introduced National Insurance in 1911 because people could no longer choose to whom they paid their insurance pennies.

…Another part of the problem is that those who are really unskilled—mostly due to the piss-poor state of our state-run education system—is the minimum wage. These are the people who are so bad that a bar manager would rather hire an Eastern European with poor English than one of these unskilled, and unwilling, workers; for these people, whose labour is worth less than £5.73 an hour, will never, ever get a job. Which means that they will never, ever be able to gain experience and get a better job, etc.

In fact, the general expense of hiring people—and National Insurance Contributions are a massive factor (you pay 11% out of your salary, your employer pays 12.8% on top of your salary)—is one of the things that keeps the unskilled out of work. And it ensures that they stay out of work because they never have a chance to prove themselves, or improve their “human capital” and thus get better jobs.

And so we enter a vicious cycle: you need to tax people to provide facilities and support for the poor; unfortunately, the taxes that you need to levy make employing people expensive, and thus create more poor people. So you need to raise taxes again, and thus it becomes even more expensive to hire people, and you create yet more poor people, etc. etc. This is why low-tax economies gorw more quickly and are richer than high-tax ones: because you don’t penalise employers—thus they employ people and you have fewer poor people.

Cuts are a good thing. Clear out the chaff, cut costs, cut taxes, set people free.