I'll house you

I really don't get it. Like why exactly, given the billions (and eventual billions and billions more) being set up to get pissed away on that new fast train line, why the government isn't instead borrowing to pay for a massive social housing programme now that would:

1) increase the supply of accommodation so push down on private rents, cutting the cost of housing benefit and private rentals
2) create assets that could be sold off,  if required, at a later date
3) before then generate revenues
4) you know, provide people with decent homes
5) address the horrendous problem with the bedroom tax which is the poor sods getting clobbered with it don't have alternative accommodation to move in to
6) create thousands and thousands of jobs and opportunities for apprenticeships
7) be used to regenerate/rejuvenate areas
8) be accurately costed and start generating at least some of the above benefits way before completion

By contrast HS2 will:

1) Do hee haw to ticket prices other than cause them to be raised to cover the cost of it
2)  cost spectacularly more than current estimates. We know this. We also know that the later phases will be postponed indefinitely - wrote someone who cycles past the Edinburgh trams every day - undermining the rationale for doing it in the first place
3)  become simply one part of a broader, subsidised network
4) because of the way procurement works, it'll generate all sorts of fat contracts for non-UK companies that means the benefits of the government spending involved will leak overseas
5) be based on mickey mouse notions of its economic benefits whereas the reality will see it suck even more economic activity darn sarth
6) waste time and money until phase 1 is complete.
7) let some English people feel less inadequate about the state of British railways vs the French

So yeah, why can't we have a massive social housing building programme now* rather than cutting however many minutes off the time it takes to get from Manchester to Leeds in however many decades time?

In the meantime, help to buy is all very good, ish. No, not really, not at all. Essentially, its a lower and middle middle class subsidy that will crank up personal debt levels as it bumps up housebuilder profits, but does hee haw about supply and is generally mental.


* rhetorical question. Successive governments have clung to a dogmatic prejudice against state social housing provision even when, as is obviously the case right now, building more would very obviously be a very good thing for the entire economy.

Fiscal austerity finale meme

Expansionary austerity was always an implausible contradiction in terms that fitted right-wing political sensibilities better than the facts. Now though a run of events have made its increasingly (oxy)moronic nature indisputably clear.

Here, cutting spending to retain the UK’s AAA rating – and by so doing holding down borrowing costs – largely defined ConDem economic policy with the rating to provide a benchmark for assessing George Osborne’s success as chancellor (remember that?). Well, the UK is AAA no longer AND borrowing costs remain at record lows i.e. Osborne couldn’t do something he shouldn’t have been doing in the first place.

Then there’s been the Reinhart and Rogoff debacle were an apparently empirical justification for cutting government debt turned out to be based on a sloppy methodology, bad arithmetic and wishful thinking.

Except, this only followed on from the debunking of the notion that government spending in response to a downturn had only a limited multiplier effect i.e. why bother spending more and anyway cutting spending wouldn’t be that painful. Paul De Grauwe's work carried this critique a step further by setting out the “strong negative correlation” between “austerity measures introduced in 2011 and the growth of GDP over 2011-12” i.e. funnily enough the countries that've cut spending the most have suffered the sharpest reductions in GDP etc., And no them doing so didn’t put a cap on their borrowing costs, that was the ECB stating it was “ready to do whatever it takes”.

Really, picking thru the above, rather than apologise Professor Ferguson should be applauded for setting out the one remaining argument spending cut supporters appear to have as to why Britain should not adopt an actively counter-cyclical fiscal policy. 

Increase government borrowing by say £25bn to finance a 3 year social housing programme? Ha .......