Britain will stick to its timetable for making the largest cuts in government spending in decades, the chancellor of the exchequer said Wednesday, vowing that the sweeping measures would bring the country “back from the brink” of bankruptcy.
Critics charge that the plan to cut spending by 83 billion pounds ($130.4 billion) between 2011 and 2015 threatens to send the economy back into recession, just as a recovery is losing steam.
Delivering the long-awaited, comprehensive spending review to parliament, Osborne said the austerity plan “is a hard road, but it leads to a better future.”
The plan will reduce spending across government departments by an average of 19% over four years and is expected to result in 490,000 public-sector job losses over that period.
There is no doubt about it; these cuts will be painful, but not nearly as painful as doing nothing and going bankrupt. Too many governments, political leaders, and populations have their heads in the sand. Action needs to be taken to stave off a credit crisis. Those countries that do so may feel some short-term pain, but they will be at a competitive advantage five or ten years from now.
Meanwhile, the US has not cut a dime from its budget. Instead, all the talk in the current Congress and the White House has been about more stimulus. Hopefully, this will change on November 2.