“the economy is a business and the population are both the employees

Comment on Reasons to Vote Labour by David.

“the economy is a business and the population are both the employees and the consumers with the Government being the management”

But it’s not that simple, with a real business when you fire someone it doesn’t affect the business beyond the obvious.

Government can not look on what they can save by cutting public spending without taking into account the cost in lost taxes, money flowing through the economy and increases in welfare costs.

It’s not as simple as we can save 10 billion by cutting ABC, because those cuts costs jobs and some of the actual savings from the 10 billion is lost through higher welfare costs, lost business flowing through the economy etc…

To use a business analogy, I see a country as a ethical or fair trade type business, there’s more to the business than just making profits and keeping costs down, they have a responsibility to the workers as well.

When the government (Labour or Conservative) start reining in public sector spending (I agree it has to be done) it’s going to cost jobs and that means more unemployed and less tax revenue.

From what the Conservatives have said they will do NOW we are looking at the possibility of a double dip recession! We with all other major economies are throwing money at the problem (economic stimulus packages) to generate growth to seed us out of recession and the Conservatives want to slash public spending now which will decrease tax revenues, decrease money flowing through the economy and increase welfare costs. They will cause significant unemployment which could push us back into negative growth (recession).

The recovery is fragile.

The only realistic way for the Conservatives plans to work is to ALSO significantly cut welfare costs. There’s no way to reduce the numbers of unemployed etc… (unless they leave Britain), so they will have to pay each family less in benefits.

They will have to cut things in real terms like working tax credit, child tax credit, unemployment benefit, income support, pensions etc… just to balance the books from making a lot of hard working public sector workers unemployed.

Also with all the economic stimulus packages from all the main players, is it the right time to cut back? Shouldn’t we allow our businesses to take advantage of new opportunities first before we reign in public spending costs that will make doing business in Britain harder?

If the Conservative fire a lot of public sector workers, private sector businesses will suffer as well as there’s less money in the economy.

BTW I’m all for cutting costs through cutting wastage and stupid expenses, but lets not go down the Conservative route and throw the baby out with the bath water :-)

David