LONDON — Britain unveiled on Wednesday a campaign to dig itself out from under a mountain of public debt, setting up a global experiment: Can a major nation drastically slash government spending without derailing its economic recovery?
The new Conservative-led coalition headed by Prime Minister David Cameron announced cuts deeper than the ones made by Margaret Thatcher in the 1980s, outlining a plan to eliminate half a million government jobs, slash welfare benefits and reduce $131 billion worth of other public spending on everything from fighter jets to social security to the arts by 2015…
In the aftermath of the financial crisis — with collapsing tax revenue and soaring stimulus spending — the budget deficit here is one of the highest in the industrialized world, standing at 11.5 percent of economic output, or slightly higher than in the United States.
In the same way this issue is an extremely difficult one here in the U.S.–how to get back to longer-term fiscal sustainability without causing the still-fragile near-term economy to collapse–the policy choices confronting the British have been tough.
But apparently they, unlike Americans and our policymakers, have decided to do something (tough) anyway. Again from the Post story (emphasis added):
“Today is the day when Britain steps back from the brink, when we confront the bills of a decade of debt,” George Osborne, the chancellor of the exchequer, or Britain’s treasury secretary, declared before Parliament on Wednesday.
The effort here is set to transform the British welfare state, setting new limits on benefits for the poor and raising the retirement age for millions of Britons. Fewer police officers will soon be on the streets, and train fares and college tuitions will rise. One in 12 government employees is set to lose their job.
Yet the British, unlike their peers in continental Europe, appear culturally more willing to cope with what Cameron has dubbed a new “age of austerity,” with polls showing almost twice as many Britons supporting deep debt reduction as opposing it.
In announcing the long-anticipated cuts Wednesday, the government portrayed its campaign as fair to the poor, arguing that the wealthy, through new taxes and benefit cuts, will proportionally shoulder more of the burden. But critics and leading think tanks have accused the government of being duplicitous, saying that women and the poor, who depend more on public services, are set to bear the brunt of the pain.
Note that the tough choices involve both higher taxes and spending cuts. From a New York Times story (by Sarah Lyall and Alan Cowell), some of the specifics on the tax side are described (emphasis added):
“We have had to make choices, choices in the things we support,” Mr. Osborne said. “We have taken our country back from the brink of bankruptcy.”
The average cut in the budgets of government departments, he said, will be 19 percent, not the 25 percent he had initially threatened.
He said a temporary tax on bank balance sheets would be made permanent. Many Britons, like Americans, are angry with big banks for their role in the world financial crisis. Mr. Osborne said the government would seek to extract “the maximum sustainable taxes” from financial institutions.
In June, Mr. Osborne also said that the value-added tax — a tax paid on most consumer goods in Britain — would increase in January, to 20 percent from 17.5 percent.
With all the “man up” talk flying around lately, when I first saw these stories I thought to myself “well, at least the British are manning up.” You know, they’re “being a man” about actually leveling with their people that taxes will have to come up and benefits will have to come down, and even for some people that might even be “you.”
But then I read this recent explanation of the term “man up” (also from the New York Times), noting the British take on the term:
The Oxford English Dictionary cites a 1947 letter to the editor of The Times of London from Henry Strauss, a Conservative member of Parliament, complaining about man up as an insidious Americanism. “Must industries be fully ‘manned up’ rather than ‘manned’?” Strauss asked. “Must the strong, simple transitive verb, which is one of the main glories of our tongue, become as obsolete in England as it appears to be in America?”
So let me rephrase. The British are not “manning up.” That term is full of counterproductive, American machoism–all sound and no fury. Blame the other for your own problems, take no personal responsibility, and get nowhere except maybe deeper into your holes. What the British policymakers are actually doing is simply “manning”–meaning they’re just doing their jobs.
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