Honesty in Government

There is currently a wild mismatch between the way that governments in Britain officially report what is happening to the economy and what is really going on. This is very destructive of what little trust remains in Britain's overextended government.

For instance, as my regular reader will know, I am sometimes to be found wandering around late night supermarkets with a confused look on my face searching for bread like St John on Patmos, and last year I discovered the fact that a loaf for under £1.10 was not to be had. I did the Atkins diet for a long time, and then went for loose wholemeal rolls, so shouldn't be that surprising to you. I haven't just discovered sliced bread.

Anyway, this condition of high expense in the basics of life is now spreading. Wheat and oil prices have been going up everywhere because of demand in the world rising. The oil price rise has hit supermarkets, which have lines of supply that depend upon large trucks moving at all hours of the day.

During the siege of Stalingrad in 1942-3, Goering assured Hitler that he could transport 500 tonnes of food per day to some 265000 men over around 400 kilometres. Of course, the Reichsmarschall couldn't.

The British supermarkets, who hold us all hostage in somewhat more silken cords, move that much in just 14 large lorries, and there are several million miles per day travelled by their fleets. The price of fuel for them is immense.

Britain is now beginning to pay for its model of dependence on extended supermakets and road transport. Had it invested properly in trains, the roads might be clearer and cities might incorporate stockyards or railway stations that could have insulated us all a little against marginal oil price change and allowed for much less stress and pollution as a consequence of our dependence on roads.

Not only will no government admit this--it makes no political sense for governments to admit it, after all, since it is an ongoing colossal mistake--but the price rises, now running at 7%, are diluted by the chosen method of inflation measurement. So we don't admit our problem officially, and we don't say how big a problem it is. Have a look at this simple Daily telegraph Article to see what I mean. Average families are spending £1300 a year more on food and petrol alone.

The country's leaders are in denial.

This sort of thing has been going on for years. The real cost of UK government schemes at all levels has been disguised by an off-the-account-books policy called the Private Finance Initiative, for instance. That has meant that billions and billions of pounds have been pledged to underwrite, procure, and buy back public goods from the private sector. Even given this, Britain has an official public debt of nearly £575 billion pounds.

The fear has been that the government will be seen to borrow excessively, thus driving up interest rates. The reality has been that huge private service providers have borrowed massively and made the government pay for it. Even the trees in the lobby of Portcullis House, where Members of Parliament have their offices, are hired from the Dutch so that their maintenance and cost are not seen as public spending but rather, offset investment. Mad.

So; we don't admit our problem; can't afford it; disguise the costs and debt.

It doesn't stop there. The government is now involved in an aggressive search for ways to raise money that will, given the restriction of credit in the world, probably result in schemes to cut costs quickly or raise hidden taxes because the country has been mortgaged to the financial industry. That industry is full of highly mobile individuals who have spent the past years not paying taxes at the same rate as everyone else and driving up London house prices, as well as generating what will prove to be ephemeral success for the British economy.

These problems are never going to be solved if the country is not honest. If the government is determined to behave like a devious alcoholic, we will end up in serious trouble very quickly, and probably worse trouble than the American economy is facing unless we sell the place to the East.

It really ought to be funny but isn't. There is no sense whatsoever of honesty, sacrifice or trust in government in this country at all, and no political alternative to waiting for something to happen.

Meanwhile, bills, taxes and real interest rates must rise. The UK deficit at the moment is lower than it has been as a percentage of GDP, but its fall depends upon growth that may be unsustainable and an assumption that debt won't be paid off. If things get even slightly worse, there will be big trouble.

Stagflation is on the horizon reader.

Ah well, perhaps the recession will test the strong. Except, such things only ever really just make life worse for us all. I'm off to give some lectures. The First World War will cheer me up.

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