Tuesday, June 30, 2009

Of course maybe Brown doesn't have to cut spending ...

Everyone seems to assume that the only way to resolve the public sector finance disaster is to cut spending ( except Gordon Brown & co of course ).

But hold on a minute folks - Brown could keep spending going and no cause a financial collapse as lenders refuse to fund him if ....

..if Brown raises TAXES.

Why is no one thinking of this ?

My guess is self censorship - everyone assume that no one would be suicidally stupid enough to raise taxes yet further when the productive part of the economy was already on it knees.

But I'm not so sure.

Socialism benefits from misery and destitution - and this plan would create much more of both. You can see why Labour might favour it..

Don't say I didn't warn you.


Tom Paine said...

The law of diminishing returns applies to taxation too. I am not sure they really have the option. They can increase the rates, without generating more revenue. It might even decrease.

Man in a Shed said...

Tom, your constrained in your thinking here by sanity and the decency not to drive your country into the ground.

Of course its a daft idea - if you care about the outcome.

I'm guessing that there are some in Labour who see this as their chance to enforce a high state spending, state control over the economy.

We shouldn't rule out the idea that Labour might run a on a tax rises manifesto.