How to Turn Things Round: By Jingo

The term 'jingoism' has fallen out of use in the British Isles. Its origin comes from a song that was popular in a different social, economic and political environment from that that under which the UK is now groaning [and today being downgraded by yet another credit-rating agency, Moody's]: the song goes:
We don't want to fight
  But by Jingo if we do,
  We've got the ships, we've got the men,
  And we've got the money, too!

Very quickly after his seizure of power in 1933, Hitler got the German economy on the move by re-armament and by building up the supporting infrastructure: re-equipping steelworks and arms factories, and building the Autobahns. This created employment, which in turn generated demand for radio sets, new clothes and better food. Britain's turnaround after the Depression of the early 'thirties was also helped by a massive increase in armaments including - as mentioned in the last couple of blogs - the construction of dozens of airfields, which dispersed the RAF's growing but limited resources and made it vastly harder for the German airforce to attempt to destroy our 'planes; and a massive house building effort.

The British economy could massively be boosted right now by re-running what we did in the 'thirties. We could order the twenty frigate-type ships the navy needs, and equip them both for missile weapons, and for rescue missions [such as the one in which we have so visibly been inadequate in the West Indies in the past few weeks]. The order for ships could only be fulfilled by sub-contracting the building of sections of the hulls to small shipyards around the country and boosting the capacity of Rolls Royce and other firms to produce the engines and equipment. That would involve thousands of sub-contractors, who would all be able to invest in improved machinery and better work practices, to apply both in their defence contracts and their increasingly-competitive civilian work. The future of Short-Brothers [aka Bombardier] in Ulster and of Westland would be boosted by having aviation capability on the new ships and on Britain's long-neglected island bases around the world. Instead of being reduced, the number or Royal Marines and soldiers should be expanded: all of this putting wages into peoples' pockets and 'real' business into the shops those people use.

At the same time, a state-funded scheme of construction of 'affordable' homes should begin: that too would create jobs in the sector; and break the near-oligopoly of the existing developers [who are deliberately concentrating on an inadequate supply of higher-cost housing]. It would add to demand for businesses all down the supply chain and thus increase demand in the whole system; and the houses would start to produce a flow of rental income within a year, which could then fund  the scheme in future years [preferably boosted by the income from selling some of the houses as the supply became less stretched].

And how would this all be paid for? As the austerity addicts would plaintively claim.

By borrowing. By offering National Recovery Bonds at a rate of interest [capped at 6%] that would be at least 1% higher then the Retail Prices Index - something close to 4% as things stand just now. There are millions of people who have been starved of sensible vehicles for their savings, all through the era of low interest rates that followed from the crisis of 2007-9. As the economic growth provided by those two stimuli [defence and housing] all other sectors would face higher demand: led by innovative young companies. Thus the cost to the government would be only the interest that had to be paid [plus administrative costs]: and that would easily be met by the growth in the national income that would have been stimulated.

It has been done before: it can be done again. The only things needed are credible leadership in both politics and economic life. The bus-pass holders have the money!