Britain’s national debt: Where did the money go?

[Hannah Bell]

Public expenditure averaged 42 percent of GDP between 1967 and 2010. In general, it varied with the business cycle, rising in recessions and declining in the economic upswings, as the tax yield increased and welfare payments declined relative to GDP...public expenditure was still running at 42 percent of GDP when New Labour returned to power in 1997.

For the first few years, New Labour stuck rigidly to the previous Conservative government’s spending plans, bringing public expenditure relative to GDP to 37 percent in 2000-01, its lowest point for 50 years and far lower than under Thatcher. Gordon Brown, the chancellor of the exchequer, only allowed expenditure to rise in absolute terms after 1999 and surpass the Conservatives’ spend, relative to GDP, in 2005.

This increase was, however, quite different from the rest of the post-war period because it rose quite sharply in a period of economic growth...Who benefited from the increased spending is revealing... The number of public sector workers rose from 4.8 million in 1997 to 5.4 million in 2008. This 12 percent increase was far less than the 42 percent increase in public expenditure. And the number employed, at 20 percent of the total workforce in 2008, was still less than in the early 1990s. So the 42 percent increase in public expenditure was not eaten up by the workforce.

So where did the money go? It went to private business. In the name of efficiency, the Labour government continued and extended the Conservatives’ policy of outsourcing public services, including almost all local government functions. A report commissioned by the Department for Business Enterprise and Regulatory Reform found that by 2007-08, of the £300 billion spent on services (as opposed to welfare payments, interest and investment), £159 billion was spent on pay and £141 billion on procurement. Just 53 percent was spent in-house. Of the £141 billion spent on procurement, £79 billion went to the new and burgeoning “public services industry”...

http://www.wsws.org/articles/2011/apr2011/debt-a23.shtml

[napoleon_in_rags]

1. Its happening here too, you'd have to be a fool not to see it.

The question is, what do you do? I have friends that look at me as completely schizophrenic for supporting the moral goals of FDR in providing for the disabled and elderly, but then also resonating with Ron Paul's sentiments that the whole thing has to be torn down because it has become too corrupt. What we are looking at is "government programs" that provide streams of guaranteed, unearned profits for corporations who operate through the revolving door. The SCOTUS ruling that considers corporations as people also virtually guarantees that these "programs" will remain profitable for private interests, as they basically can afford now to make the legislation.

In this context, what does it mean to be a leftist anymore, that you support forced taxpayer subsidies to corporations? What does it mean to be on the Right, that you support the empowerment of corporations working for the government and dictating policy which is certain to raise taxes because it helps their bottom line? What do any of the old debates even mean anymore?

[Ghost Dog]

2. Revolution and Rebuild

from first principles.