Better fill up while you can, 'murkn:
"Britain’s austere cutbacks a cautionary tale for US" by Megan Woolhouse |
Globe Staff, December 30, 2012
SALISBURY, England — Trussell Trust was founded here more than a
decade ago to help starving children in Bulgaria, but in recent years
the nonprofit has expanded its mission dramatically in a
once-unthinkable direction, opening more than 200 food banks across the
United Kingdom.
This year alone, the centers have distributed free groceries to about
130,000 British families, more than double the number in 2011.
“The fact that people need food in 21st-century Britain is certainly
shocking,” said Molly Hodson, a spokeswoman for the trust, as she sorted
canned beans at the Trussell Trust clearinghouse recently. “This is a
time of crisis in the UK.”
As US political leaders debate tax increases and spending cuts to
close the nation’s budget deficit, England is implementing deep cuts in
government spending as part of a multiyear plan to halt a widening
budget gap and and preserve the country’s AAA credit rating.
Once you learn that all governments are basically beholden to private central banks you aren't hungry to read the mouthpiece media.
But two
years of austerity have backfired as a struggling economy slipped back
into recession and a plan that was supposed to bring deficits under
control within five years will take longer than predicted.
In many ways, it is a cautionary tale for political leaders in
Washington who face a Jan. 1 deadline to reach a budget compromise
before a series of automatic spending cuts and tax increases take
effect. About $500 billion in US government spending cuts will take
effect unless President Obama and Congress reach an agreement.
Some economists, noting England’s malaise, said such measures would
defy generally accepted economic views that cutting spending at a time
of economic weakness only hurts the economy more.
“An austerity drive now would raise our already
painfully high unemployment rate and might trigger another recession,”
said economist Peter Diamond, a Nobel laureate and professor emeritus
at the Massachusetts Institute of Technology. “If the cuts are big
enough, it can derail the economy and set it back, which is what we are
seeing in Britain.”
Britain’s Parliament, led by Conservative Prime Minister David
Cameron, enacted steep spending reductions when his coalition government
took office in 2010. Most departments were required to slash at least
25 percent from their budgets, shaving $180 billion from the nation’s
$1.4 trillion debt.
The government estimated 66,000 public jobs would be lost in the
first two years of austerity, but so far about 372,000 have been
eliminated, according to Lombard Street Research, a London forecasting
firm.
The Cameron government also imposed a wage freeze for all but the
lowest tiers of government workers, tougher requirements to qualify for
public housing and disability payments, and massive cuts to the welfare
system.
At the same time, the sales tax on most goods and services was raised
to 20 percent from 17.5 percent and capital gains taxes on investments
increased to 28 percent. Corporate taxes were reduced to 24 percent from
28 percent over five years to encourage business growth and hiring.
And so were taxes on the wealthy.
Related: Sunday Globe Special: British Protest
Back when austerity was being called a success.
Cameron said the measures were necessary for a nation facing its
largest-ever peacetime debt, a financial abyss that grew deeper after a
massive taxpayer bailout of the nation’s banking industry in 2008 and
2009.
Peacetime debt? What all those troops are doing in Afghanistan then?
Yup, austerity so bankers can get paid.
The government and its supporters concede that these steps are
painful in the short term, but argue they will maintain the confidence
of financial markets, attract business and investment, and lead to
prosperity, much as the austerity policies of Margaret Thatcher in the
1980s revived a moribund British economy.
Oh, that again.
Earlier this month, George Osborne, chancellor of the exchequer, the
government’s top financial official, announced that austerity measures
would need to be extended into 2018 because of a slower recovery than
forecast, which he blamed on the broader economic slowdown in Europe.
Oh, your government lies to you about the economy the same way mine does?
But Osborne asserted that the bitter economic medicine was beginning to
show results, as evidenced by the flow of investment into British
government bonds, a sign of increasing confidence in the UK economy.
You see WHO gets PAID OFF FIRST, right?
“It’s a hard road, but we are getting there,” Osborne told the House
of Commons. “Britain is on the right track — and turning back now would
be a disaster.”
The British economy had appeared to be recovering from its own
housing bust and financial crisis, but spending cuts enacted in 2010
began to take a toll by the end of that year, and Britain slipped into a
double-dip recession.
It's called a depression, and we were told all the moves by the genius central bankers had avoided such a thing.
“The consumer died, and at the same time, Europe, the UK’s biggest
trading partner, went into a tailspin,” said Carl Weinberg, chief
economist at High Frequency Economics a forecasting firm in Valhalla,
N.Y.
Yeah, blame it on the tapped-out, unemployed, financially-strapped consumer.
Nearly everyone in Britain has been affected or knows someone who has
been affected.
Same here.
Labor unions have launched protests against measures
that slashed jobs, benefits, and public pensions. One in five people
between the ages of 16 and 24 are out of work. Job opportunities are
scarce — even with a university degree.
We have so much in common with each other!
Like many who graduated from college since the global financial
crisis four years ago, Jonathan Fry, 25, has struggled to find full-time
work. He signed up for a volunteer police force in South London in the
hope it will lead to something more, taking a 16-hour training course to
qualify. But he understands the reality — police hiring is down in an
era of budget cutting.
“The hardest thing to do is find a job,” Fry said on a recent day at a
South London food bank, where he also donates his time. “I’m just
biding my time.”
Derek Wade, was a high school teacher before government cutbacks cost
him his job. Today, he works as a security guard, recently on location
at a construction site in Central London, not far from Buckingham
Palace, earning much less.
Hey, at least the banks are solvent, right?
Wade, 47, said he landed the security job after a year of
unemployment, but the stress of that period contributed to the end of
his 22-year marriage. Now, the father of four lives alone in a small
apartment outside London.
“It’s tough,” he said. “You have to believe in yourself, believe that you’ll always land on your feet.”
While the UK economy improved around the Olympics this past summer,
officials have predicted another decline at the end of this year.
What am I to do when the paper flat-out lies to us, dear readers?
About
2.6 million people were unemployed in October, about 1 million or 60
percent more than at the start of the recession in 2008. The
unemployment rate was 7.8 percent, about the same as the United States,
but is expected to rise.
I get the sense the British government fudges the numbers the same way mine does.
For those near the bottom of Britain’s economic ladder, daily living has become desperate.
Brenda Nanteza and her 7-year-old son have been homeless for nearly
two years, spending nights at the homes of friends and acquaintances.
Nanteza, who emigrated from Uganda to London as a college student,
dropped out of school when she had her son and worked as a housecleaner.
But those jobs have dried up. Without money to buy food and other
basics, she frequents food banks while her son is in school.
“I don’t know what to do anymore,” Nanteza said. “You just can’t keep moving from couch to couch.”
The government plans to reduce billions more in spending on welfare
benefits and overseas development in 2013, redirecting money into
improvements for roadways and bridges, according to Robin Twyman, first
secretary for trade and business affairs at the British Embassy in
Washington.
“We got into this mess because of borrowing and we can’t get ourselves out of it by borrowing,” Twyman said.
That I agree with. Just declare the debt invalid and odious and let's move on.
But the cuts, and the recessions, have exacted a toll. Salisbury taxi
driver John Reading, 74, said he can’t afford to buy a pint anymore and
has watched pubs in his town close. Many young people avoid them to
save money for other pursuits while older regulars do without.
“Everybody’s struggling, apart from the very rich,” he said.
Reading said he still works because his retirement investments and
government pension — akin to Social Security in the United States — have
shrunk.
Yet Reading said he is luckier than some....
And not as lucky as others.
--more--"
That's odd. We already have a hunger crisis in AmeriKa.
