CNJ Comment - Now children pay the price for banks’ excesses

Published: 8 July, 2010

ECONOMICS is not an exact science. If it were, it would be possible to predict and prevent the mess economies – particularly free-market economies – find themselves in every few years.

This has never happened.

Only a handful of economists warned of the risks the overheated financial bodies were taking with their packaged “sub-prime mortgages” three years ago. Few listened to them.

Now, the Tory-Lib-Dem coalition has let loose a barrage of facts and figures that supposedly prove there is no alternative to an all-out assault on Britain’s deficit.

Many economists and political thinkers who failed to spot the momentous risks the banks had been taking years ago are now leading the charge against the nation’s deficit.

But do they simply have the public sector in their sights or the welfare state?

Opponents of government policy argue that more emphasis should be put on growing the economy.

Many of them were the same ones whose warnings about today’s recession went unheeded.

Again, they are being marginalised.

This week comes a perfect illustration of the government’s mad economics – the axe on the Building Schools for the Future programme.

Many secondary schools in the borough which were earmarked for essential refurbishment now face the doldrums.

Among them are Maria Fidelis, Acland Burghley, Hampstead and William Ellis.

If – as planned – more than £200million were spent on these schools, the creation of jobs alone, not only on these sites but also in other parts of the construction industry, would have been able to feed the Treasury with much-needed revenue.

Deficit budgeting leads to reduced tax revenue and, possibly, to a depression.

The hope that jobs lost in the public sector will be compensated by jobs gained in the private sector is almost fraudulent in its conception.

Which part of the private sector – catering, shops, hotels? How can they expand in a shrinking economy?

The victims in Camden this  week are the pupils and the teachers.

The cabinet’s mantra that “We are all in this together” rings hollow when, more likely than not, the children of the makers of this policy will attend private schools.

It will take many months, perhaps a year or longer, before the full impact of the government’s “deficit” policy – particularly the increase in VAT – will be felt by people.

Today, bewilderment. 

Tomorrow, possibly a concerted resistance.