With its disguises as “high finance” for the mystified and “Keynesian fiscal policy” for those “in the know,” deficit spending by the government was quite a successful scam for a long while.
When the UK’s ex-prime minister opened her new government in September, Liz Truss followed tradition by trying to run the oft-used scam again. But this time it did not work. Eventually, even successful scams stop working. Its failure became hers but also her party’s, the Conservatives.’ Neither of them understood the scam’s limits. Perhaps its disguises had worked best on those who repeated them most in thought and word.
In its UK version, the deficit spending scam entailed the Conservative (but also some Labor) governments repeatedly cutting taxes on corporations and the rich. Serving their donors explains most of this. Without this scam, such behavior would have forced governments to act in traditional ways they now sought to avoid. One way would be to raise taxes on others to offset tax cuts for corporations and the rich. Governments only dared to do that partially, never enough to compensate for revenues lost from the tax cuts benefiting corporations and the rich. The other way would be to cut government spending. Governments did that also, especially when the Conservatives recast public services as unnecessary, wasteful, counterproductive, or in short, “socialistic.” But doing so angers the masses and risks losing votes for the government. Even when the…
