Britain: Top economists demand austerity measures

[Hannah Bell]

Twenty top economists have demanded the introduction of austerity measures immediately after the general election due by June. With the UK economy holding the largest budget deficit in peacetime history and among the largest in the developed world, they argue that the next government will have to carry out huge spending cuts very rapidly.

In order to be “credible” with the financial markets, they state, “the government’s goal should be to eliminate the structural current budget deficit over the course of a parliament, and there is a compelling case, all else being equal, for the first measures beginning to take effect in the 2010-11 fiscal year.”

The economists, who made their demands in a letter published in last weekend’s Sunday Times, are mainly UK-based, including six academics from the London School of Economics (LSE) led by its director Sir Howard Davies. Other signatories were Harvard economics professor and former IMF chief economist Ken Rogoff and Stanford economics professor Thomas Sargent.

LSE economics professor Tim Besley, who organised the letter, said it proved that that there was a “significant consensus” among economists on what to do about Britain’s record deficit. “I don’t want this to be seen as us siding with anyone,” he claimed. “But it does suggest that the Conservatives are where majority opinion lies.” Besley says the current Labour government lacks a “credible” plan to reduce Britain’s budget deficit...

Unemployment has risen sharply — it could reach three million people or nearly 10 percent of the population this year — and amongst young people it is 20 percent. Huge numbers of those in work have seen their wages and/or hours cut. Personal insolvencies and bankruptcies have risen to historic highs and millions have been driven to rely on illegal sources of credit to survive. Income inequality has reached its highest point since the end of the Second World War.

A massive diversion of public funds has already been carried out to protect the wealth of the financial elite. Now, the top economists are throwing their weight behind demands for a fundamental restructuring of British capitalism through the impoverishment of the working class.

http://www.wsws.org/articles/2010/feb2010/aust-f22.shtml


With practically every country in the world calling for debt reduction & austerity budgets, cutting social services, etc. -- who's all the money owed to?

[AllentownJake]

1. Peak oil

The money isn't owed to anyone the cost of powering machines is about to get more expensive.

Remember, what kicked off the sub-prime crisis and lay-off wave was the interest rate increases in the loans combined with the high gas prices.

Energy resources are being depleted.

Supply and Demand.

[jeanpalmer]

3. What's scary is we're still in a deep recession

but the price of oil is at $80 a barrel, a level it didn't reach til the latter part of 2007, near the end of the bubble economy. What's going to happen to the price of oil if we get any kind of recovery? And what will that do to the recovery?

I see that Goldman Sachs and the Chinese government's investment fund just formed a partnership dedicated to the purchase of oil. I take that as a bad sign for the rest of us.

[tama]

2. "Credibility with financial markets"

States support and guarantee the "financial markets" with all they got so they could keep on lending from those financial markets to be able to guarantee the continuity of the financial markets...

[cutlassmama]

4. China and whoever has oil

[blindpig]

5. Who are these people?

If they are government employees, fire them first.

k&r

[fasttense]

6. It's funny in a sad way.

The uber rich got richer by selling ponzi schemes to scam off the wealth of a county's middle class and poor. When the ponzi schemes fell apart, the uber rich went to the country's government and took tax money, welfare, to keep from going bankrupt. There wasn't enough taxes (because the uber rich greatly reduced what they paid in taxes) to cover the ponzi schemes so the government borrowed the money. Because they borrowed so much money to keep the uber rich richer, the government now has a huge pile of debt.

The response of these same uber rich who took the government's borrowed money to keep from going bankrupt on ponzi schemes that targeted the middle class and poor? "Cut all programs that help the middle class and poor."

The uber wealthy got their welfare from the government now they want to cut everyone else's welfare.

Or is it that the uber rich merely want to kill all the middle class and poor?

[lonestarnot]

7. A lesson in do without may be harder on the theives.

:evilgrin:

[blueworld]

8. +100 n/t

[izzybeans]

9. Democracies should never be held hostage by "financial markets"

It's just another way of saying the elite will crush the people if we don't get our way.

[reggie the dog]

10. austerity my ass

raise taxes on the rich, make the fuckers pay over 90 percent in income tax like when FDR was president.