Clegg and Cable get Y the credit crunch matters

The Liberal Democrats have been trying to make a splash this week, and at first they may seem to be playing in right-wing waters. Nick Clegg announced that he is “sceptical that central, controlling government gets things right”, and he believes “that tax is a means to an end and government should not take a penny more than it needs”. For the leader of a party that has arguably not entirely come to terms with the abolition of proposals for across-the-board tax rises to fund substantial increases in public spending, that’s quite a statement, and an acknowledgement that, especially in today’s economic climate, the public simply can’t and won’t pay more tax.

The party leadership has realised that the credit crunch will have a huge impact – not only on this generation, but also on the next. At a Reform fringe event at conference this week, Vince Cable said “free everything isn’t a sustainable policy”. As public borrowing increases, Cable is to be commended for pointing out the intergenerational effects of “buy now, pay later” fiscal policy. As if a potential recession isn’t enough of a worry for “Generation Y”, they will also be saddled with the bills for today’s spending splurge in the years ahead. continue reading… »