The austerity myth was that in times of economic downturn the role of government is to be like a housewife and trim the household budget. This is a myth because the goal of austerity was to reduce government, both local and central. The other reason it is myth is that the role of government is to drive growth, not to reduce things.This was doubly a myth as at the same time hundreds of billions was being pumped into QE. The vague hope was, like trickle down from tax cuts, this sloshing of money into increasing the value of assets would feed into consumer purchasing. Thus growth would occur. But like trickle down it is a much watered down impact on consumer spend. Direct investment from the government into much needed infrastructure projects in the north and other deprived areas would have given people well paid jobs and stimulated growth. But regrettably when Hammond says that QE was "the only tool they had" what he meant was that infrastructure investment was counter to Tory thinking, and thus not acceptable. It was the opposite of austerity. It sounded like that frugal housewife not cutting costs but in fact paying for an extension to the house. So it did not happen, even though it would have been the right thing to do.
Alan Clark ● 1693d