After the anti-cut March for the Alternative 7 weeks ago, a counter-demonstration from the pro-cut Rally Against Debt group took place opposite the Houses of Parliament.

The Atmosphere
The rally had been organised by Jacob Patch, who had limited his aspirations to a simple static demonstration (requiring no permission from the Police).

There was a very quiet atmosphere, with the winklepicker and tweed clad attendees apparently being unfamiliar with the environment of a demonstration. Despite several people professing their preference for Anarchism and a reduction in Government, a brave soul would occasionally attempt to awaken the crowd with some political chanting. Unfortunately this resulted more in embarrassment than enthusiasm. Most people at the rally seemed to know each other and instead were busy chatting and exchanging gossip.

The rally was supposed to run from 11am – 2pm but everyone ran off as soon as the speeches had finished at 1pm. Maybe everyone walked down to Downing Street to support the considerably larger Palestine Solidarity rally?

Even with plenty of coverage in the national press, could it be that Patch didn’t expect that many people to turn up? 2000 people had pledged to attend the rally via a well known social networking site, but barely 200 people actually turned up (or 218 to be precise, as calculated from my own photographic evidence).

Despite being announced immediately after the March for the Alternative and potential attendees having 7 weeks notice (yes, 7 weeks!) – the organisers have suggested that “the Royal Wedding and especially the ‘No to AV’ and ‘Local elections’ diverted many people’s attentions away from the event. For many, by the time this was all over it was too late to book trains buses, get time off of work etc.”

Others have suggested that the reasons for the successful anti-cut March for the Alternative are because the majority were receiving benefits, therefore having a vested interest. Hmm – yes, people attending rallies and protests do usually have a vested interest in the rally objectives. Also, would the person that put forward this explanation be suggesting that they aren’t receiving any kind of state benefit (NHS, Police etc), and that they will never need to draw on these benefits above and beyond their own tax contribution?

Pro-cut mouthpieces have also suggested that the reason for the low attendance was because they didn’t have Union subsidised coaches to herd attendees with. Well this didn’t stop the anti-war protests being so successful with record attendances of 2 million people back in 2003 did it?

From one point of view the rally was an abject failure with such a low attendance. It would suggest that this group does not represent the silent majority, as they have previously suggested. Nevertheless, the Rally Against Debt group garnered plenty of free publicity for their cause.

So what was the Rally Against Debt all about?

The Motivation behind the Rally Against Debt
The organisers are concerned about the huge debts resulting from what they call ‘irresponsible’ public spending. Some suggest that debt is the the handmaiden of slavery and that it’s not fair to continue borrowing money to live a lifestyle and fund public services that the public simply can’t afford.

The actual level of debt or discussing its proportion to GDP (the market value of all final goods and services produced within a country in a given period) can distract from the main point at hand. After all there lies, damned lies and then there are statistics….. Let’s just focus on the style of monetary management that should be employed by the government.

Deficit (the borrowing of money) and debt (the resulting amount of money that is owed) have to be tackled separately. While the deficit can immediately be reduced by cuts in spending, in all fairness it would take decades and several governments to get debt back to more manageable, pre-crash levels.

More details of the planned cuts can be found here

Even with the massive debt taken into account, the pro-cut group explain that reducing the deficit will enable the government to tackle the debt. It has been suggested that by the end of this parliament the taxpayer will be paying an awful lot of money in debt interest payments alone which would be more money that the entire Education budget. Pro-cutters suggest that these debt repayments would be better spent on maybe the education budget itself.

So to follow the rule, if the government reduce their spending and the deficit – then the budget for education would be even smaller. The debt would still be there though – but that’s OK, it’ll be cleared in a gazillion years. Meanwhile children would only have to go to school for 20 minutes per week. Maybe the pro-cutters should campaign on giving children the vote?

Reasons Why Cuts in Government Spending Will Be Harmful
Although several of the authors hyperlinked above have (correctly) pointed out flaws in this particular article, the main message still stands true.

If the government cuts back and hoards their cash, then other people will follow suit too. A vicious cycle is created in which people stay at home staring at the television instead of going out, stay at home instead of going out and spending their money. If people don’t spend then this means that businesses sell less goods and services – that businesses make less money. In turn the businesses will pay less tax and may even end up making people unemployed.

So the government spends less to save more, but as a result they are forced to spend even less as they collect less tax and have to support more unemployed people on benefits. In the worst case scenario, eventually no one is working and the government’s coffers are completely empty. In effect there is no function or purpose for the government and the people call for it to end. The size of the government is reduced to zero and anarchy reigns instead.

Maybe this is why there was a distinct lack of the Black Bloc or SolFed groupies rampaging around London on the day of the Rally Against Debt? The idea of the government making such dramatic cuts must be a dream come true for them!

Reasons Why Maintenance & Even Increases in Government Spending Will Be Beneficial
Deficits are a necessary evil and are essential to stimulating the economy. Mirroring the above argument, if the government spends and invests in businesses and services then other people will follow suit too.

If countries cut too fast, they kill their economic growth. The last two nations to be down-graded (in their credit ratings) were Ireland and Spain – who followed the UK government’s cutting proposals to the letter.

Alternatively countries like South Korea have gone ahead with by far the biggest stimulus packages and yes – collected resulting bigger debts. But South Korea has also emerged from the worldwide recession the fastest. At least South Korea can make a positive effort on clearing their debt.

Of course, the pro-cutters worry that too much confidence will encourage people to live in a state of credit. As was seen at the beginning of this recession, households could soon find themselves being unable to pay their credit cards and mortgages after having too much fun.

The economy will always swing from a recession to a boom – it always has and always will. It’s impossible for either the government or private households to accurately judge what the right amount of money is to spend in order to keep the economy stable.

The key is to make sure that each time the economy swings – it doesn’t swing too far in either direction. When someone finds the solution to that, could they also tell the world where the Holy Grail is too?

Other Solutions To The Deficit & Debt Problem
To cut or not to cut is not the only solution. The alternatives include –

1) Ensure that all companies pay their taxes – it is estimated that an extra £16 billion could be collected every year using this method.

2) Introduce the Robin Hood taxes – comprising of a Financial Transaction Tax (£250 billion per year globally), a decent and properly enforced Bank Levy Tax (which would raise more than the £2.5 billion per year currently proposed) and a Financial Activities Tax (£4 billion per year).

In Conclusion …
In relation to the supply of public services by governments, let’s not forget that is it essentially immoral to not support those in more unfortunate circumstances than you. After all who knows when you could be unfortunate enough to find yourself needing the help of other taxpayers…..

Government spending has to be protected – it’s just handy that it’ll help everyone at the end of the day whether you’re employed or not.