The Problem With Britain's Economy

----

LIKE CHATTING ECON WITH ME?
△ I have a private Discord server for Senior and Chief economist Patrons / members.
Otherwise I sometimes hang out in two Discord servers:

SOURCES:
I've linked my sources in the blog that goes along with this video. Links are in the text.

Timestamps:
0:00 - introduction
1:39 - the promise of austerity
7:20 - sponsor
8:35 - the reality of austerity
11:16 - is austerity ever good?

Attribution:
- judge pictures from Wikimedia
- Cameron videos from the YouTube channel of the conservative party
- Drone footage shows hours-long queues at Dover from the Guardian

Narrated and produced by Dr. Joeri Schasfoort
Animations by Hugo (Into Europe)

[martinhartecfc]

What I find most striking about your analysis of what they were trying to do is that lowering wages was a feature not a failure. At this point, the scale of the damage they've caused is so huge that it is implausible that they'll ever be able to admit it to themselves; but there's an angry part of me that wants them to be made to see it.

[hakanbjrnson]

The expected spending boom didn't happen. Yeah, obviously. We crawled out of the recession having experienced the single biggest price hike and reduction in Sterling spending power I'd seen in my life up to that point. Prices didn't go down. They just stabilised for a while until COVID ushered in another marked price hike. We can't buy our way out of this. On the contrary, every time I see increases in prices, I tighten the purse strings, reduce frivolous spending to preference essentials, and save what I can for emergencies. They want us to spend to reinvigorate the economy? Their bank balances are larger than ours, they can lead by example.

[FreestateofOkondor]

Since these numbers are public can we already call this a scam? Maybe not the originial idea but the fact that after a while the Government should have seen that it was still "employing" the same amount of people but kept the consultant strategy instead of hiring proper civil servants.

[MoneyMacro]

Small mistake alert. I sometimes say expansionary and sometimes expansive austerity in this video. The correct term is expansionary austerity.

[joaocustodio]

I don't even understand one of the two expansionary austerity theory mechanisms. So if people get fired from the government, wages fall, which is good for companies. But in what world would that make these companies invest more?? They would not invest because, due to that increase in unemployment, aggregate demand fell. With less demand for goods and services, where the hell would they invest?

[petermanuel]

Every council have £100K a year consultants come in regularly and say they need to fire more lower level staff, the hypocrisy is blatant.

[DeanRTaylor]

I've worked in quite a few different companies and every one has tried the same "we are too bloated, we're not cutting we're improving efficiency" I've never seen it improve anything it just gives the shareholders a short boost in profits and bonuses while the overall quality of work, products and services provided just drops. Everytime it happens i move on. It's a shame that the conservatives also tried the same technique but with critical services.

[WhichDoctor]

The problem is that now the UKs economy is in such terrible shape due to austerity the main opposition party who look almost garrenteed to win the next election are saying that they need to carry on with the austerity policies that made us soo poor because there isn’t enough money to reverse them

[jayunito]

I worked in Higher Education In the 13 years of Tory rule and my pay was frozen for six of those years. With inflation it was effectively a pay cut.

[jabberwockytdi]

The growth of poorly paid " mini-jobs" zero hours contracts etc. is a general problem across the developed world to a greater or lesser extent, depending on the local politics and labour laws. But in the UK where manufacturing industry has been in decline for decades teh problem is fairly extreme and a low productivity low wage services sector just doesn't cut it as a growth engine - let the " accidentally on purpose" crash landed telephone sanitisers in the Hitchikers Guide to the Galaxy be a warning to all policy

[dantaylor]

And yet now neither of the main parties are pledging to reverse austerity and spend more, because of the damage spending less has done... People simply do not understand the benefits of government spending, and think govt debt is always catastrophic.

[Julian-tuem]

Video came out 7 minutes ago and people are already upset at it even though it's a 12 minute video. Some people got very triggered by the title.

[sigi]

When, in your search for nuance, you end up at Kuwait as an example of austerity sometimes being a good idea. I think you've made a very strong point on why it's really never a good idea anywhere in the real world.

[jasongarfitt]

I knew austerity was a lie as soon as the Tories announced the first tax cut for bankers. They also ignored the fact that government departments are not isolated in their impact and cuts to welfare would directly lead to more illnesses and crime, putting more stress on the police and NHS. When will the people of Britain learn that the Tories dont have the country's interests at heart?

[scpatlnow]

As an FYI with all this evidence to the contrary...Liz Truss was ready to slash the budget one more time just to drive home the point that Tories never admit to mistakes...they double down. She just said the quiet part out loud. That got her in hot water.

[andresilva]

Why austerity doesn’t work: someone else’s spending is someone else’s income.

[dunndudebemelol]

Brexit following austerity really hurt investement. It would be interesting to see how different things would be if either policy had not been followed, nevermind both.

[burlacuninel]

If there's a thing I learned from paying attention to politics is whenever a politician says let's cut some state jobs he actually means let's kick the public system a little more in order to rely more on the private sectors. And then on the long run the state ends up paying more and the tax payer receiving less in terms of quality of services. We have the example of the USA, yet European politicians haven't learnt a thing.

[szurketaltos]

Not massively borrowing when interest rates were low was a mistake.

[acommenter]

2:20 - most that debt came about because the government bailed out the failing banks by....buying them
The government kept trying to pretend this money went into thin air but they where actually entitled to the profits of some large banks and the income they where generating.

The tories ruined Britain, they ramped up immigration when Britain had a weak labour market, They kept persisting with austerity whist interest rates where below inflation and kept that condition for over decade. Britain is now a nation of low incomes, swollen house prices, social disorder, cultural collapse and zombie businesses.