Labour leader, Ed Miliband, has called for the world to come together in order to kick-start the global economy.
In an article in the Financial Times Ed Miliband wrote that there should be an early G20 summit meeting so that a ‘Global Plan B’ to sort out the planet’s finances could be developed.
He also accused the Prime Minister, David Cameron, of ‘standing on the sidelines’ and not showing leadership.
Speaking at a visit to the Vauxhall car plant in Luton he also said that banking reforms should be pressed ahead with and not be stopped by ‘special interest lobbying by the banks’.
Then came the inevitable argument for growth. ‘…..a global plan for growth actually is very important for Luton and very important for this plant. Unless we get these exports up, unless we have other European countries growing, then there aren't going to be the places to sell to.’ He said.
But consider. We have not even begun to pay for the last lot of growth yet, so how are we going to pay for more?
Also, at 2% growth, in 35 years time we need to be producing twice as much on a global scale as we do now. Then seventy years from now that needs to be four times more than today. That’s just one lifetime. And if we produce it we need to use it and then quickly discard it in order to keep the bubble growing at that magical 2% figure that always seems to crop up. Hardly a sustainable concept is it.
Both governments and citizens across the world, to a greater or larger extent, fuelled the last one or two decades of growth with debt. And debt is just a form of work that has not yet been done. We all have a lot of work to do to pay for the past before we look to the future.
With the world’s financial and economic system constructed as it is today it would take interest bearing debt to start growth going again and yet more interest bearing debt for states and people to buy the goods and services.
The planet is already drowning in debt, how is more going to help?
It’s always attractive to insist that the money we borrow is to ‘invest’ in a growth that will be more than enough to pay old debt and build a prosperous future.
Every government around the world will tell you that is exactly what they do or did, including the UK coalition that is still adding to our overall debt pile today. So why haven’t the ‘investments’ of the past paid for the debt of today? And why should we think that this time will be any different?
We do not need a ‘plan A’ of austerity or ‘plan B’ of spending our way out of the hole when the aim of both in the end is yet more debt fuelled growth once the recovery starts. The same old plans of the past, which never seem to do much except keep the rich in clover and the government of the day with funds for its pet projects.
We need a plan C – a true plan of sustainability, but that would probably mean a stripping away of wealth from some and a reduction in the power of the state. So fat chance!