Monday, 21 June 2010
Back to the future
Much of the money was in fact in the form of loans that we only recently paid off. Only around $3bn was in the form of aid from the US that was not later repaid. This was just 3% of the total national post-war debt. It was investment and growth that finally reduced the debt, and not any contribution from the US.
In fact, recovery could well have been faster had the US not imposed 'strings' which encouraged huge military spending to support the American war in Korea and Britain's own declining colonialism in places like Kenya and Aden.
So, rather then undermine my argument, the example of the Marshall Plan only strengthens it. If investment not cuts was the way out of a much worse recession post-1945, even at the price of a national deficit over 250% of GDP, it is the way out of recession now when both the recession is not as bad and the deficit is much lower.
As President Obama has warned, the right wing penchant for savage cuts in public spending could not only hinder the recovery of the global economy, but plunge us into a new recession. But slash and burn economics were never about economic logic. These cuts are an ideologically driven assault on the role of the state in the economy. If the Tories are successful , they will entrench inequality in this country for generations. The battle for progressive alternatives to the cuts agenda must be won. The future of our children depends on it.