The Existential Financial Problem Of Our Time

Tuesday, February 28, 2012
By Paul Martin

by Tim Price, Director of Investment at PFP Wealth Management

In December last year, the poet Alice Oswald withdrew from the TS Eliot poetry prize on the grounds that the prize was being sponsored by an investment company (Aurum, a fund of hedge funds manager).

How you feel about this principled stance may depend on whether you are a UK taxpayer. If you are a UK taxpayer, you will probably feel relieved that your tax pounds are no longer being squandered on the Arts Council’s sponsorship of the prize in question “a tiny victory” but a victory nevertheless against the arrogant dissipations of the state.

Ms Oswald seems to believe that poetry prizes should be funded with everybody else’s money, rather than by a private patron grown-up enough to be responsible for its discretionary expenditure (private patronage being what you might call “traditional” in the arts).

As a graduate in English Language and Literature, this commentator has no animus against poets. But I am not sure we want them in charge of the economy. They are notorious for starving in garrets for a reason.

Ms Oswald’s “protest” is part of a wider intellectual malaise that lazily conflates government spending with the real economy and which conveniently ignores the fact that without a flourishing private sector, there would be no government and certainly no government spending to speak of.

It is part of that lazy thinking that inspires journalists to keep speaking of “the government” spending money on this or that, as if “the government” were somehow sitting on an infinitely large pile of “government money” that most of the time it was unreasonably withholding from worthy causes.

The reason our economy is knackered is because successive governments have indeed pandered to subjective worthy causes with money that those governments did not possess.

Tomorrow and tomorrow and tomorrow, taxpayers will be paying the bill. It is not government money because the government doesn’t have any. It has liabilities only. It is taxpayers’ money.

The finest achievement to date of the UK’s coalition government has been a triumph of PR’ as one might expect, given that PR appears to comprise the only work experience our current Prime Minister has ever had outside politics.

A myth has arisen, polished frequently by an ignorant media, that the British government has started to deal with the grotesque debt inherited from the previous government. But as Prosperity Capital’s chief economist Liam Halligan points out, government spending was actually higher for the fiscal year 2010/11 than under the last year of the last government.

The Rest…HERE

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