I am worried. Gordon's tax cuts make some sense in the short term because of the "feel good factor" they will bring. All of ecomonics is based on how we feel so its nt a bad move from that perspective. But I have real concerns about how sustainable this is.
Firstly, given that it was consumerism that helped fuel this crisis, why do we look to the same response as the solution. Tax cuts are a market driven solution and its the market model that ahs failed us. There is some sense in giving for cash to save, but to encourage spending again as the solution suggests that lessons have not yet been fully learnt.
Secondly, despite the views of some that all tax is bad, we actually pay taxes for good reasons; to invest in our communities, to build infrastructure to meet our needs and to help the vulnerable. Additional spending under Keynesian thinking uses these infrastructure needs as a vehicle to keep the economy going when the market fails (as it always does in the end). Keynesian models have a track record of working, but if we reduce the tax revenue at the same time as spending more on infrastructure, then we will be less able to help those in need, especially those who are suffering because of the market failure.
Tax cuts may buy time and a little popularity but they will not help in the long term aim of making sure more and ore folk are lifted out of poverty. In fact they may well mean instead that more and more folk find themselves in poverty without the support to get out again and that's not a good place for a Labour Government to find itself in.
Keith Simpson's Christmas Reading List
6 hours ago