Recently Robert Reich posted 15 Economic Lies as separate Twitter messages. I hope he will not mind if I combine them here in one easy to access list and adapted for the UK.
As an American, Richard was obviously writing for the US situation but as far as I can see most items in his list also apply to the UK so I have taken the liberty of amending the list for a UK audience, this means that any errors are mine alone:
- We must continue to cut the deficit. Truth: Trying to cut the deficit (and failing) has robbed the economy of the demand it needs, causing slowdown and recession.
- The rich are the job creators. Truth: Ordinary people are the job creators through their purchases of products and services. If ordinary people do not have the cash or confidence to go out and spend there will be no demand and hence continuing recession or stagnation for the foreseeable future.
- Corporations need tax cuts. Truth: Corporations are sitting on cash mountains.
- Low-income citizens pay little or no taxes. Truth: They pay higher share of incomes due to VAT and national insurance.
- “Markets” work best without government interference or regulation. Truth: without government regulation the largest and most ruthless organisations fight for monopoly positions or create cartels and then ruthlessly exploit their unrestricted power.
- Inflation is just around the corner. Truth: A triple/quadruple dip recession and continuing, decreasing real wages are around the corner.
- Super-wealthy over-taxed. Truth: When you take into account all taxes i.e. include national insurance and VAT along with income tax, the rich pay roughly the same percentage (about 33%) of their income as everyone else. The super rich pay less because their income is usually not subject to income tax and so they pay a lower rate, they can also afford t0 employ tax avoidance advisers to cut their tax still further (or they just go ‘non dom’ and pay no tax at all (like the owner of the Daily Mail).
- Wages are rising. Truth: The Median wage continues to drop, adjusted for inflation. While the income of the wealthiest goes through the roof.
- Raising min wage kills jobs. Truth: It fuels demand. Countries and States with higher min wage have no higher unemployment. Ordinary people on low wages have no choice but to spend any extra income they get thus fueling the demand needed by the economy.
- NHS must be cut / privatised. Truth: NHS more efficient / cost effective than private health insurance.
- Raising taxes on rich slows economy. Truth: No such correlation. Economy grew faster between ’46 & ’81 when taxes were higher.
- We’re creating nation of “takers.” Truth: Reason for rise in welfare costs is due to the recession.
- All government spending the same. Truth: Public investments in infrastructure, education, & basic R&D spur economic growth.
Don’t fall for the mindless assertion that “markets” know best. (Robert Reich, Feb 2013)