Budget fails to address fundamental flaws

Osborne, Britain’s Chancellor of the Exchequer, delivered his second budget on 23 March 2011. While this one was planned, as opposed to the emergency budget when the Coalition formed the Government in May 2010, there was little to address fundamental flaws in the UK economy that caused a near collapse in the financial sector in 2008.

He reeled off a who’s who of capitalist institutions backing his plans: the IMF, the OECD, the European Commission skipping over the fact that none of these highly respected titans of the capitalist order even sniffed the impending crisis that nearly broke capitalism’s back in 2008. Not much creditability gained there then.

Mesmerising the audience with a volley of bewildering stats about below expectations growth; tax giveaways on revenue yet to be taxed; budget cuts on expenditure yet to be spent the theatrical performance was acclaimed as polished by the cheerleaders of capitalism – news columnists. Though none the wiser the public was reassured and the capitalist circus goes on.

This distraction has been cleverly used to cover up fundamental cracks in the capitalist banking system:

• Fiat money backed by little more than the colour of a particular government
• Fractional/risk reserve banking that creates ‘money’ way beyond the productive capacity of the real economy
• Financial assets that are in effect merely pieces of paper whose values are based on the whim of speculators
• Inadequate financial regulators in awe of the sector they are supposed of contain

A penny taken here, a penny given there seems ludicrous given the severity of fault lines in the system.

The annual budget is thus a farcical attempt to gloss over the cracks in order to restore confidence in a flawed capitalist system that is just as susceptible to another major crisis today as it was in 2008.