Tuesday, 5 June 2012

Steven Pearlstein on Britain

Here (via MR).

Other than Labor Party politicians, nobody seriously doubts the wisdom of cutting back on the number of public employees or the size of their pensions, or capping welfare payments to any household at the median income, or bringing more efficiency to public education or the public health service through greater competition. The idea that these will be done once the economy returns to normal growth is a political fantasy.
I wonder why Mr Pearlstein thinks this.
Below is a graph of public sector employment. It hits its max at 2005, then declines. Previous governments of all political hues have also tried to bring competition into the NHS and education, not always during recessions. (Reform during a recession might actually be a bad idea -- here is a paper I wrote about that.)

He goes on to say sensible-ish things about targeted public investment while we can borrow cheaply. I expect that the government will try to do more of that, while sticking to its rhetoric.