The difference between reality and projections

It’s a standard complaint that if government spending rises less than it had previously been budgeted to then that’s a cut. This is how we were able to have all those cries of austerity while government spending in cash, real, nominal and as percentage of GDP terms continued to rise. The previous plans had the spending rising more than it did.

We need to recall this point here:

Rishi Sunak has room to cut taxes by £30bn to alleviate cost-of-living crisis

This room to cut taxes is against the previous plans. It’s not against any objective view of reality. Predictions were that the vast budget deficit would continue even as we’re at full employment and as that gap is now only large instead of vast we’re told there’s this room.

This not, really and wholly, being so. Given that we are at full employment - the closest we’ve been for decades at least - then no, the economy doesn’t have room for more stimulus in the form of a budget deficit. This is just that time when the Sun shines when finances need to be rebuilt.

Of course, we’re all in favour of all tax cuts everywhen on the simple basis that they mean less of ours being wasted by them. But the implication of this is that both the taxes and the spending need to be cut, not just the taxes.

And certainly not just the taxes because the government finances look marginally less awful than they did.

The NHS isn’t the world’s greatest health care system, that’s true, but it does at least try to cure incontinence rather than just limit it to its current incidence. Perhaps we could adopt that principle more generally, let’s try to cure fiscal incompetence rather than just allow it to run on at the current level?