Skip to main content

The Worst Governments Since the First World War

Good management means that over your period of management you do not spend more than you earn. Except in national emergencies good governments should not borrow money that must be repaid by future generations. Which governments left future generations to pay the bills?

The data for government borrowing and government expenditure are available (see for instance UK Government Spending). These are shown on the chart below:

Click on chart to view full size

The chart shows the increase and decrease of public spending and borrowing by each government in the UK since 1923, changes in debt are measured in 2005 pounds (ie: inflation adjusted).

The actual value of the changes in National Debt is shown because the total National Debt represents an amount that we are spending now that we are asking our children to repay later. Increasing National Debt is acceptable in times of true National emergency but amounts to no more than buying votes in ordinary circumstances. The ideal level of National Debt is zero over a whole cycle: a government should borrow to restore high levels of employment during a dip in the cycle and should repay the loan in the good times that should follow.

The figures for the Coalition that ruled from 1935 through the war and of the Labour government after the Second War have been omitted because of the special circumstances that prevailed. It could also be argued that the credit crunch has given an erroneous portrayal of the last Labour Government even though this Labour Government was probably largely responsible for the global credit crunch. The graph below uses debt levels up to 2008 so shows the data with the debts due to the credit crunch omitted:



This chart is not really valid because Brown probably caused the global credit crunch.

The governments of the sixties and seventies were busy paying off debt (largely accumulated in the war). One of the most prudent governments in British history is the Tory government of the 1950s-60s: they paid off debt and kept public spending under control. It is ironic that Heath's Tory government was the biggest public sector spender during the 60s and 70s but he was paying off debts as well. Callaghan's Labour government was one of the most prudent but for being prudent it was assassinated by the unions. Blair and Brown hold the all-time public spending record and have left our children to pay for it.

It is clear from the graphs that John Major's Tory government and Blair and Brown's Labour governments are easily the worst in the past century. Major's government was particularly affected by the fiasco of attempting to enter the euro-zone but at least they tried to keep spending under control. Almost all of the public sector savings in the Tory period from 1979-1997 were made during the 1980s when Thatcher was PM and frittered away by Major afterwards. Brown's government was just profligate, increasing spending beyond the limits of the funds available and living beyond our means without any attempt at controlling public spending. They increased the National Debt even when the economic cycle was in an upturn. It should be noted that the public sector pension crisis is not included in the figures and is as serious as the credit crunch. The pension crisis occurred almost entirely during the 1997-2010 Labour administration. It should also be noted that about 30% of the current excess debt that is crippling the UK had nothing to do with the credit crunch and was part of a rise in indebtedness dating from 2003.



Brown's mantra was "prudence" and making the books balance over the economic cycle. He did neither of these things and has left the nation's finances in a parlous state. This failure has not, as usual, been spotted by journalists.

Blair and Brown, especially Brown, ran the worst government of the past century.  We are paying for it now, they could have saved in the boom like the Germans but no, they spent everything until there was nothing left. Worst of all they increased public spending and ignored the pension crisis as well as getting into debt so that any government that follows them must decrease the public sector and meet a deluge of strikes and protest. 


Brown's cunning ploy was to artificially boost property values by allowing vast levels of immigration, this then created an artificial boost in GDP which he used to hide his excessive borrowing by quoting it as a % of GDP (See Immigration, house prices and boom economics). The guy seems to have been a crook.


See also:

Is Labour any more than the Public Sector party?

Comments

Popular posts from this blog

The Falklands have always been Argentine - Las Malvinas son Argentinas

"The Falklands have always been Argentine" is taught to every Argentine child as a matter of faith.  What was Argentina during the time when it "always" possessed Las Malvinas?  In this article I will trace the history of Argentina in the context of its physical and political relationship with "Las Malvinas", the Falkland Islands.  The Argentine claim to the Falkland Islands dates from a brief episode in 1831-32 so it is like Canada claiming the USA despite two centuries of separate development. This might sound like ancient history but Argentina has gone to war for this ancient claim so the following article is well worth reading. For a summary of the legal case see: Las Malvinas: The Legal Case Argentina traces its origins to Spanish South America when it was part of the Viceroyalty of the Rio del Plata.  The Falklands lay off the Viceroyalty of Peru, controlled by the Captain General of Chile.  In 1810 the Falklands were far from the geographical b

Practical Idealism by Richard Nicolaus Coudenhove-Kalergi

Coudenhove-Kalergi was a pioneer of European integration. He was the founder and President for 49 years of the Paneuropean Union. His parents were Heinrich von Coudenhove-Kalergi, an Austro-Hungarian diplomat, and Mitsuko Aoyama, the daughter of an oil merchant, antiques-dealer, and huge landowner family in Tokyo. His "Pan-Europa" was published in 1923 and contained a membership form for the Pan-Europa movement. Coudenhove-Kalergi's movement held its first Congress in Vienna in 1926. In 1927 the French Prime Minister, Aristide Briand was elected honorary president.  Personalities attending included: Albert Einstein, Thomas Mann and Sigmund Freud. Figures who later became central to founding the EU, such as Konrad Adenauer became members . His basic idea was that democracy was a transitional stage that leads to rule by a new aristocracy that is largely taken from the Jewish "master race" (Kalergi's terminology). His movement was reviled by Hitler and H

Membership of the EU: pros and cons

5th December 2013, update May 2016 Nigel Lawson, ex-Chancellor of the Exchequer,  recently criticised the UK membership of the EU , the media has covered his mainstream view as if he is a bad boy starting a fight in the school playground, but is he right about the EU? What has changed that makes EU membership a burning issue?  What has changed is that the 19 countries of the Eurozone are now seeking political union to escape their financial problems.   Seven further EU countries have signed up to join the Euro but the British and Danish have opted out.  The EU is rapidly becoming two blocks - the 26 and Britain and Denmark.   Lawson's fear was that if Britain stays in the EU it will be isolated and dominated by a Eurozone bloc that uses "unified representation of the euro area" , so acting like a single country which controls 90% of the vote in the EU with no vetoes available to the UK in most decisions.  The full plans for Eurozone political union ( EMU Stage