Shadow Prime Minister David Cameron once claimed that Gordon Brown often seems too preoccupied with saving the world than to occupy himself with the concerns of the British people. Whether this charge is true or not, the Tories have managed to maintain a 13% lead in the polls over the Labour Party, despite recent policies promising income-tax increases, reduction of public-sector payments and tax credits.
In 2011 the British debt is expected to reach a £1 trillion height and Labour seems to be doing little to combat the looming burden of payments. Gordon Brown has proposed to sell public assets in an abnormally depressed market and thereby raise £3 billion for debt repayments. The plan should cumulatively raise approximately £16 billion, but some £13 billion will be reinvested in other public projects. The ambivalent nature of Labour’s debt management plan have only contributed to low approval ratings and sinking re-election chances.
A majority of Britons agree: budget cuts are unavoidable. Preparing for the elections that must be called by early summer, the Tory party has already begun, in general terms, to outline their planned policies. David Cameron and George Osborne, Shadow Chancellor of the Exchequer, have catered to a public desire for “straight” talk, a euphemism for realism. The Tories propose that government debt will necessitate higher taxes, but more importantly freezes on public-sector pay, reductions of tax credits and the promotion of “small” government.
Despite the logic of these proposals, the entire question of government has been set by the wrong paradigm. It is not a question of large government versus small government, but of efficiency versus incompetence. The solution to the financial crisis is not necessarily the reduction of government. Remember the Keynesians who urged for large bouts of government spending and the necessity of stimulus. The bailout successes [or lack thereof have more to do with the good sense of the politicians who implemented them than the mere policy itself. Furthermore, consider the more tightly regulated banks of Spain and Canada that did not face the same severity of the credit crunch as in the United Kingdom or United States. An efficient government, which may imply regulation, can guarantee the health and even competitiveness of a market that cannot regulate itself.
The responsibilities of government vary from issue to issue, including and alternatively precluding government intervention and regulation. The duty of government is the protection of the public from exploitation, of the economy from monopoly and other unhealthy manifestations of an unregulated market. The task of government is also the recognition of its own limitations and the reasonable restraint of services which it cannot afford. To suggest that surmounting the impending debt dilemma is only a matter of decreasing the size of the government is nothing more than an oversimplification of the crisis facing the United Kingdom as well as many other countries around the globe.
It is not the size of government that determines political and economic success; it is efficiency.
