The Great fiscal debate

Its been well known for a while now that some honesty about fiscal policy was needed. Everybody is aware that we are in masses of debt. But no party has been truly willing to step up and tell voters that spending must be cut or taxes must go up or both.

Today we could have triggered that debate, but instead it was used as Labour for electioneering instead of trying to be honest with voters. Labour now intend to dub the Tories the '10% party' because supposedly that is how much would be cut if the Conservatives win the next election.

The government will now face massive interest payments on the loans that they have taken out in order to fund their fiscal stimulus, not to mention the increase in spending that occurred through automatic stabilisers.

Gordon Brown and Alistair Darling cannot try to kid people into thinking if they win the election in 2010 then they will not cut spending or raise taxes, they would have absolutely no credibility. What is needed is honesty from our politicians, at a time when they are already mistrusted by most because they are thought of as crooks.

The electorate are clever enough to understand that spending is going to need to go down. Gordon Brown will have to demonstrate honesty about what he would cut, or if he does not want to cut anything how he would pay for it. One can only assume this would be through further taxes on the rich. If that's the case then be upfront about it, just for once. I would have thought that might be quite a vote winner!

The slur against the Conservatives is also quite unfair. Healthcare spending would be ringfenced, for example, so that we did not see the quality of that falling. So how would it actually be achieved? Well, the Conservatives are big on their efficiency savings, so we can probably assume that would make up some of it. Defence spending is an obvious cut, we've pulled out of Iraq and are not deploying everybody to Afghanistan. Savings may therefore be possible here. Outside of that departments such as transport can expect some pretty tough cuts despite having to cope with rising passenger numbers.

As a country we've benefitted from a decade of overspending compared to what we should have been doing (easy to say now). Now we have to pay the penalty. Its estimated that we may now have a decade of austerity. Unfortunately it will be what is necessary in order to get us back into a sustainable fiscal position.

I couldn't help but mention the Harvard MBA programme with management students now taking an oath, similar to the hypocratic oath, promising to act morally and in the long term benefit of a firm that they work for.

Presumably this will be known as the hypocritic oath.