UK cuts total $134 billion millions of jobs and will influence Canada and the United States
The UK government of Conservative David Campbell delivered on his tough-love promise by cutting $134 billion from government spending.
They are called the worst spending cuts in Britain since the Second World War.
Financial pundits are already predicting President Obama will wield a heavy axe in the US after the mid-term elections on November 1st.
In Canada, Finance Minister Jim Flaherty has admitted he must find ways to cut spending and soon, since he has lost any ability to increase the deficit and spend his way out of the recession.
UK government cuts in summary
- Departments are being told to cut spending 20%.
- 500,000 government jobs will be cut.
- Welfare payments will be cut $29 billion which disability advocates say will be a disaster for those living already in poverty.
- National pension will take one more year to earn – age 66.
No one and no department has be spared the axe. During the next 4 years, another 500,000 jobs are expected to be lost in the private sector on the UK.
The reason for this is the rising tide of debt and the currency crisis around the world and especially in the European Union. Since the Greek crisis emerged, it became obvious that government spending and debt in most countries in the UK was out of control.
The UK government intends to get their financial house in order by 2014.
This is of course the exact opposite of the “stimulate the economy” theory that permeated western governments in the wake of the financial meltdown of 2008. There is no guarantee cutting will improve things in the short term or long term.
History tells us that when the US President sat back and let the market collapse in 1929 without intervention, it signaled the start of the Great Depression.
The National Post reported the story as U.K. spending cuts foretell our future
In what are being called the United Kingdom’s “worst ” government spending cuts since the Second World War, the coalition government of Conservative Prime Minister David Cameron yesterday delivered a message that is soon to be heard around the world. It’s a message already received this year in Greece and now daily in France, where demonstrations, roadblocks and violent protest are disrupting the economy. It’s a message that will sooner or later sweep across North America.
The words in the message are austerity, spending reductions, fiscal restraint, government layoffs, deficit elimination, debt reduction, spending freezes, job cuts and reduced entitlements, tax increases and lower benefits.
Nobody wants to hear of this in the United States, where the fiscal tsunami has yet to land.
The outlook is less bleak for Canada, where debt and deficits are not as large. But there are few signs that any Canadian politician is ready to fully acknowledge the discipline that will eventually be needed to unravel Canada’s fiscal situation.
By Stephen Pate, NJN Network