How austerity is holding back our economy

The Conservative economic policy of austerity is causing our economy problems, Corbyn's investment led growth is a strong and credible economic policy that we should pursue.

Yet 'Jeremy Corbyn will bankrupt the economy' is still the most popular lie pushed by our press since Mr Corbyn was elected leader of the Labour party. A dishonest narrative that must be challenged for the good of our democracy. The lie Phillip Hammond repeated today in his speech at the Tory conference. But is there any truth to the claim?

The fact is we need Corbyn's economic approach, our economy is going nowhere. Since the Financial crash we have the 2nd worst performing economy in Europe. In real terms wages have declined by 10.4%, only Greece can match those figures. If financial predictions are correct, 2008-2021 will be the longest period of earning stagnation in 150 years. Our GDP growth has not transferred to growth in wages for workers. The wealth has not trickled down, funny that. The long term news is even worse, between 1979 and 2012 only 10% of income growth went to the bottom half of the income distribution. We are the most unequal country in Western Europe where child poverty and homeliness are spiraling out of control. We need a radical change in economic policy to create real growth in wages for working people.

Saying this Corbyn is not pursuing voodoo economics, he promises practical solutions to fix each of those economic concerns. However what his economic policies will truly fight is wage stagnation. He does not promise unicorns, he is simply not a Neo-Liberal, he believes in Investment led growth prescribed by Jeffrey Sachs and other major economist theorists. It's proven economic theory that has worked all across Europe, most recently in Portugal, but especially in the Scandinavian nations. The growth model is often known as the Nordic Model, and it's what Corbyn wants to replicate. It's main principle is to call out the lie of austerity, because austerity measures are strangling economic growth.

The reason the Tories have been able to get away with Austerity is because it seems logical. We are spending more than we bring in tax money, so lets cut that spending. Just like a household expenditure?

Wrong. By cutting expenditure all you do is depress spending. Depressed spending puts the economy into decline, reducing revenue. The government needs to increase the spending of consumers in our economy and profit from those. We cannot continue to treat tax revenue and expenditure as two separate issues, they are inter linked factors, and cutting expenditure cuts revenue at the same time.

For every penny you save cutting jobs from the civil service or the hospital or the school, you add one more on to the welfare cheques.

We need a more progressive tax in this country, because it will our economy by increasing spending. The poor send vastly more of their income than the rich. So by increasing the tax rate on the rich we boost our economy by allowing more money to be spent by either the government in infrastructure or by those in poverty. It help achieves distributive justice and economic prosperity.

To stimulate spending we must keep our public servants pay level with inflation. If we continue to allow nurses to go to food-banks and sell off hospitals we will be draining both our economic growth and our treasury of money.

I wrote about this phenomena in Portugal earlier in the year. They implemented Corbynite economic policies, raising public spending by increasing social security, public servants pay and infrastructure spending among other things. They achieved record growth for the decade and cut the government deficit in half in 2 years. If the British economy responded similarly to these economic changes we could have the deficit down to £26bn and grow the economy at over 3% per annum.

The other policy to help generate economic growth we need is Corbyn's living wage. Raising the minimum wage to £10 per hour by 2020. Labour estimate it will give 5 million workers a pay rise, all at the bottom end of the pay spectrum. However we cannot get away from the fact that a minimum wage economically only truly acts as a wealth redistributor. However we have seen how all growth in earnings has gone to the top of society in the last 35 years. But more importantly by redistributing wealth to people who will spend it we can increase our economic growth. Again it is a policy that acts as a fiscal multiplier that will drive spending.

Corbyn's economic plans have one clear goal. To drive economic spending. To tax money that would sit in bank accounts in the Bahamas and invest it in the British people.

Investment led growth is what we need.

#JeremyCorbyn