The British Attempt at Slow Seppuku

The British are engaging in truly draconian spending cuts in the face of a recession to the tune of £156 billion (roughly 20% of the current budget) and 490,000 employees.

By way of perspective, the UK Budget in 2-7-2008 was about £520 billion, and the job losses would be equivalent to the loss of over 2½ million jobs in the US, and that is just the direct losses, when one considers the follow on effects, essentially the jobs that are held by people who provide goods and services to these public employees, are likely to be even larger.

If one assumes that the total job losses will be roughly double the civil service cuts, and this is a conservative estimate, with the UK's workforce size of roughly 30 million, we would see at least a 3% increase in unemployment.

On the bright side, unlike their fellow wingnuts on this side of the Atlantic, they are also applying the cuts to their Defen(c)se establishment as well (more in a later post).

I think that Paul Krugman has a wonderful bit of snark on this, where he calls the people who will be hurt by this British Fashion Victims:

In the spring of 2010, fiscal austerity became fashionable. I use the term advisedly: the sudden consensus among Very Serious People that everyone must balance budgets now now now wasn’t based on any kind of careful analysis. It was more like a fad, something everyone professed to believe because that was what the in-crowd was saying.

And it’s a fad that has been fading lately, as evidence has accumulated that the lessons of the past remain relevant, that trying to balance budgets in the face of high unemployment and falling inflation is still a really bad idea. Most notably, the confidence fairy has been exposed as a myth. There have been widespread claims that deficit-cutting actually reduces unemployment because it reassures consumers and businesses; but multiple studies of historical record, including one by the International Monetary Fund, have shown that this claim has no basis in reality.

No widespread fad ever passes, however, without leaving some fashion victims in its wake. In this case, the victims are the people of Britain, who have the misfortune to be ruled by a government that took office at the height of the austerity fad and won’t admit that it was wrong.

…………

It would be funny if it were not tragic.