Why are people speaking of Austerity measures?

It takes just a few minutes research on Uk Public Spending to determine that the Conservative Coalition Government under David Cameron has been lying. The argument I hear in the UK is that because of over spending the country is in danger of being downgraded and losing the low interest rates on its debts. This may or may not be true - that belief in itself is hard to prove (worth pointing out that debts in the past have been 10s of times larger than they are today). The cause we are told of this debt has been over spending on the social security system. This is easy to test. The graphs below show (Fig.1) the Inflation Adjusted Debt in £Billions, and (Fig.2) the same as a percentage of GDP.

Fig 1 - National Debt in Billion GBP

Both graphs show that almost 50% of the debt has occurred not in the 1997 to 2008 period but in the 2009 to 2013 period. This is the period of Conservative government, and the period of bank bailouts.

Furthermore a £300-400 Billion debt (adjusted for inflation in 2005 pounds) seems to have be acceptable since the 1970s, and as a percentage of GDP 40% was tolerated throughout the Thatcher years.

So it is hard to see why the Conservative government went into panic when they took the reigns in 2010. It is even harder to understand why the decided that the solution was attacking the welfare state when it is clear that there was no problem here and spending was quite in line with the past 40 years and even previous Conservative governments.

Fig 2 National Debt as % GDP

The new problem has been with the banking sector. It would appear that it is the banking sector that has created this unusual debt and it would follow that the banking sector should deal with it.

What is revealing is that it cannot. So the great powerhouse of free market, the city, has actually had to turn to the tax payer to bail it out of a situation it cannot create wealth to solve.

This begs the question why do we tolerate The City in the first place? It when the going gets tough they have to turn to the tax payer as the lender to bail them out, why was the tax payer going to them in the first place to get mortgages for houses. The tax payer should have been going to themselves!

What the credit Crunch proves more than anything is the World's economic thinking has been going in the wrong direction. Rather than deregulating markets, and privatising capital, instead loans should be backed by the tax payer (as they have eventually become anyway). The Treasury should be the national lender, and profits from rent should be used to run the country rather than line the bladders of bankers with Champagne.

Such logic will fall on deaf ears in the Conservative upper ranks because it is apparent that the attack on the Welfare system has been a long planned war of attrition and along with privatisation has been the wish of the Conservative party funders for many decades. The removal of government backing to both the poor and various sectors would improve profits for business owners, and provide a windfall of cheap industry to buy up.

It would appear if this reading of the UK state of affairs is true that the UK is heading downwards to the aristocratic days of the 19th Century and the loss of everything that was fought for in the 20th Century. A land of a few supremely rich who hold all the power and a land of a vast dispossessed poor. Either that or the voting public puts pressure on politicians to perform and explain themselves and questions the media and the propaganda that it is pressured to spread.