I’m back in the UK and have been catching up with the daily political banter. The theme of virtually every newpaper story is the huge cuts the coalition government is ramming through. Papers like the Times are singing Cameron’s praises for being ‘fiscaly responsible – they are running editorials that back the cuts on the basis that Britain’s ability to borrow in the future is directly effected by the levels of debt the country maintains.
From a business perspective, this has some truth to it (although Keynesian economists dispute the premise). Banks are certainly reticent to lend to a business that have structural debt problems.
But Britain and every other country being forced to go through austerity programs are not businesses. They are countries with human beings in them. Debt reduction is usually aimed disproportionately at welfare programs and not the wealthy. David Cameron is enacting cuts across the board, and while the rich will certainly feel it, they will not be affected the same way working class families with parents doing multiple jobs will.
While Britain’s debt will be reduced with the giant cuts, the effects on the poor will be devastating. Britain will lose a generation to unemployment, dire poverty and lack of opportunity as vital services are cut. While business will recover first, the rest of the country will be left to rot.
So while the banks will be happy about the government’s commitment to reducing debt, the actual people of Britain will not be.
I’ll be posting more on this during the week with some indepth coverage as I think this is a point worth repeating again and again. After all, we have had 30 years of conservative economics as the prevailing orthodoxy, and it is about time other theories were given some air time.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.