The Tory Party conference is underway in Britain, and the main theme seems to be the enormous slashes to the welfare state. The cuts are coming in all forms - cuts to child benefits, cuts to government jobs, cuts to public services, and cuts to even defense spending. Here's the chancellor George Osborne on why the cuts are supposedly necessary:
Imagine if I were to stand up in the House of Commons in two weeks time and say: I'm cancelling the deficit plan. I agree with Ed Miliband. Let's delay the tough decisions. Let's borrow more. Let's go on adding to our debt.
Imagine if I said that. Now imagine what would follow. The market turmoil. The flight of investors. The dismay of business. The loss of confidence. The credit downgrade. The sharp rise in market interest rates. The extra debt interest. The lost jobs. The cancelled investment. The businesses destroyed. The recovery halted. The return of crippling economic instability. Britain back on the brink. We are not going to allow that to happen to our country again.
There are many fancy arguments as to why Britain needs to take an axe to the welfare state. The Tories are using terms like 'structural deficit', 'market turmoil' and 'the 'flight of investors to imply that Britain's spending is so out of control that its ability to borrow money will be compromised indefinitely if it isn't reigned in. These are of course terms used in the financial sector- the breeding ground for most Tory politicians. They are well versed in the language because most of them grew up around or it and believe that the interests of the city represents the interests of the country.
The notion that a country can cut its debt and come out of a severe recession by radically cutting government spending has been disproved over and over again throughout history, most glaringly when the financial industry collapsed in 2008. When the rich and powerful lost all their money and went into astronomical amounts of debt, the only solution was for the government to bail them out so they could get back into the business of lending money. This simple principle only seems to apply to people with money. If you are poor and rely on the welfare state to house and feed your family so that you can be economically productive, then tough luck. Instead of more help, you need some good old market discipline to get you through the hard times.
The IMF has prescribed 'structural adjustment' (drastically cutting government spending) as the remedy for ailing economies for many years, and has had spectacularly disastrous results literally everywhere it has been applied. Not only did the cuts not reverse economic stagnation, they propelled them, leading to years of lost growth and potential prosperity.
Why the Tories think doing the same thing to Britain will have different results is anyone's guess, but my thoughts are that they simply don't care.
The Conservative party represents the interests of big business and big banks. The poor and middle classes are there to service the needs of corporate Britain, and their own needs are expendable. The government is willing to take on the debts of the rich so that they can get back on their feet, but the poor must learn to do it themselves.
This latest round of cuts to those who need it most will likely have a devastating effect for years to come. Children will suffer when their benefits are cut and government workers will have to make do with lower paying jobs will little security. The result will be a deepening social and economic divide and the loss of a generation's hopes and aspirations.
But the rich, of course, will be fine.