It was due to the deregulation of the banks, weakening of Labour rights (such as Labour opting out of the ‘working time’ Directive), rampant consumerism fuelled by private debt, causing housing bubbles. As Max Kaiser points out, it is private debt, which Labour and Conservatives encouraged, which is responsible for this mess.
“The Deficit was caused by Labour’s runaway public spending and failure to deal with a ‘something for nothing’ culture”
In the last year before the Financial Crisis, public spending stood at 41% of GDP and national debt was just 44.1% of GDP.
According to the National Audit Office, the Bank Bailout increased the National Debt by £1.5trn. The National Debt now stands at 73.5% of GDP and is expected to reach 101% by 2015.
Throughout this time, public spending has stayed roughly the same, rising to 44% of GDP under the Coalition government.
The deficit and the increase in national debt are the results of the Bank Bailout and Austerity (which has choked off economic growth).
“Our benefit reforms reward hardworking people”
The government has been caught making wildly inaccurate claims about the efficacy of its benefit reforms to contribute to a myth that benefits are soaring because of…
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