We have argued this elsewhere in threads about the Eu whereas I started this one specifically to discuss UK defence cuts.
The curious thing is that the conservatives seem to have had an effective and realistic defence revue under the smokescreen of spending cuts and thereby accomplished something which they could not have done in good times. They have established a marker that the Royal Navy finally gives up any pretensions of being the 'senior service'. The issue of whether to carrier or not to carrier has been going on since WW2. WE have now entered a trial period of no carriers with all the signs being an intention to carry on that way. Who are we going to sell them to? How much are they worth compared to their cost?
Someone above commented on the RN having clung to quantity rather than quality of ships. I'm not sure if that is bad or good- rather depends on who you have to use them against or for what. But this package isnt simply a cost reduction, it is a clear marker to make a permanent change in the navy, down-scaled. Something labour for ideological reasons could not do, and the conservatives have.
As to what you would rather talk about, saying 'the public sector consumes wealth, private sector creates wealth', is indeed an extremely simplistic statement. For example, precisely what wealth does a restaurant create? A big part of the private sector is such service industries which create nothing tangible, certainly nothing more tangible than, for example, home helps provided by the state. By contrast the armed forces creates a very tangible and saleable spinoff of weaponry which has been one of the chief exports of this country for a long time. That is entirely due to government spending. Yet here we see the conservative state stepping back from this tangible export business. The NHS similarly is a major contributor to health development and you can't tell me that having your bad hip fixed is not a tangible increase in your personal wealth. Most 'industry' in this country either public or private is 'service' in nature and in effect there is no difference who is running it. A classic case, the banks. They make nothing, unless it is personal debt.
Th Keynsian approach as I understand it says nothing about spending 'surpluses'. It is mainly invoked at times of debt, arguing that the way to get out of government debt is to acquire more debt, spend spend spend until tax revenues pick up to pay for it. The argument is that in bad times people become innately cautious and either cannot or will not borrow. Thus government must to get economic activity moving. The theory suggests that a government should borrow as much as it can, indeed logically should always borrow as much as it can. The conservatives are not doing it. Actually, it would seem there is not a cigarette paper to be slid between labours planned cuts and the conservatives actual ones now, though the rhetoric between the two sides is different and labour plans called for extracting relatively more money from the rich and less from the poor. This is very logical if you are trying to boost spending by the public. Those rich guys are the ones who right now are sitting on their money and not spending or borrowing. It will not help to give them more.
The EU is a redistributive system. The british government, including the conservative thatcher one, deliberately chose to make it so. So what is strange if it is does what it was instructed to do.
Oh, I think the limit on Keynsian spending is the ability of the economy to respond. Thus saturation may take place when all industry is working at maximum capacity. We are not there yet. The one obvious exception is the housing market, which attracts a vast amount of the nations investment yet creates no wealth. You would expect that demand would stimulate construction, but government policy specifically prevents this. This is a huge distortion of the economy which is threatening to become so big as to endanger it.
