Taxes! Taxes! Everybody hates them but they are as necessary as the air we breathe. However, it is hard to know taxation is growing all the time, beyond the good or bad economic environment. Modern Democracy is a thirsty monster who always asks for more money, more civil servants, more resources. Although we constantly create new public needs to solve public problems, the middle taxpayer feels things could be better. In fact, citizens believe public budget should be managed more efficiently. It is not an easy task as officials keeping the money depend on the increase of resources to survive. To play a political role is nowadays a professional career and no one wants to retire at 45. I would like, but I am not a politician. Therefore, the main problem is related to the impossible mission of cutting public spending when fiscal policy is managed by politicians who have to balance public interest and party commitment. Polls, popularity and reelection are in the core of the problem. The Social Market Foundation of the United Kingdom has analysed the issue in this country and finds that the fiscal policy projections Government makes is biased and cause serious deviations and mistakes in the British public finances.
«In the UK, fiscal policymaking has traditionally been highly centralised and discretionary, with all fiscal projections and decisions emanating from HM Treasury. The Government is right to argue that the global financial crisis of 2007-9 was an unforeseen external shock that caused the public finances to deteriorate. But it is also clear that excessively loose fiscal policy in the years preceding the crash has left the UK in a more difficult fiscal position than it might have been, and threatened the creditworthiness of the government».
The authors of Forecasting Independence: Taking the politics out of fiscal projections think «that the most appropriate reform to the institutions of fiscal policymaking would be the creation of an independent Office for Fiscal Analysis (OFA), separated from fiscal decision-makers in government, that would undertake all official fiscal Statistics Authority, would ensure that it was entirely free from the risk or perception of organisational bias».
The British case is so common all over Europe. The lack of realistic projections on the evolution of the public finances, specially during the crisis has contributed to a huge increase of the public debt. We will be paying for years. It is true that nobody previewed the dimension of the economic collapse, but it is also clear that a neutral analysis and decision making over the future fiscal situation could save several billions. Politicians must introduce the issue of fiscal neutrality in the policy agenda.
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