The National Government has never hesitated to put cuts in public expenditure firmly in the front of its shop window. “Smaller government” is in many senses the defining objective of John Key’s administration.
In adopting this stance, our Government has made common cause with right-wing politicians across the western world. From David Cameron’s Tories in the UK to Angela Merkel’s insistence on eurozone austerity to Mitt Romney’s Republicans, all have sought recovery from recession and a brighter future by reducing the role of the state.
None has been deterred by the obvious difficulty, now more than ever confirmed by recent experience across the globe, that cutting government spending in a recession means a smaller economy and a longer and more arduous route to recovery – and a sterner struggle to reduce government deficits.
But an apparent absence of economic rationality is not the only reason for questioning the Government’s sense of priorities over this issue.
Ministers seem to assume that not only does cutting public expenditure help the economy, but also that it can be done without losing anything of value.
Exactly. The global mania for shrinking government spending in the middle of a recession just doesn’t make sense to me.