UN: British "Austerity" policies violate human rights

Well then, they're really not going to like what Brexit is doing to the economy and people now.

Brexiters are not going to like being told what to do by an international body.

Or maybe not, if the international body is saying something that the Brexiters want to hear.

Who can tell these days?

What I find amusing in a dark and twisted way are all the working class voters who voted Leave as a middle finger to the establishment that have been implementing austerity policies that disproportionately harm the working class... and now there's every chance that Brexit will usher in even more austerity policies to do even more damage.

It's like throwing a snowball at someone and having it cause an avalanche.

The worrying thing here is what happens next when we don't have austerity measures. Because the alternative could be worse.

The rationale for austerity is that we have a spending deficit. There isn't enough money coming in from taxation to pay for all the services that we want the Government to give us - education, healthcare, pensions, all that good stuff.

The populist view is that the spending deficit is caused by immigrants claiming benefits and using services. That's not actually true. On the whole, immigration reduces the deficit because most immigrants are of working age and so contribute to the tax income more than they take out in services. But that sort of line doesn't play well with the Daily Mail readership so it tends to get ignored.

The real reason that we have a deficit is because we are living longer. That means the Government gets less in tax but has to spend more in health care and pensions. That's an uncomfortable truth that most politicians daren't say because the old folk think we're picking on them. The global recession didn't help either, but we were heading for problems anyway because of our ageing population.

How do you deal with a spending deficit? There are four basic choices - (1) borrow money, (2) reduce the cost of the state through austerity measures, (3) raise taxes or (4) have a stonking economy which makes more money for the state through increased tax income as we all get richer.

So what have we just gone and done with the referendum? We've shot our economy in the foot by voting to leave a highly profitable trade agreement with the EU. Theresa May has leaned on the Chancellor to postpone his austerity measures because they're running scared of the angry 52% who are fed up with austerity. By the same reasoning, it's going to be hard to put taxes up as Osborne won't be allowed his emergency budget.

That means that the Chancellor has no choice. He has to borrow more money each year to make up the gap in the Government's income. Right now that borrowing is fairly cheap because interest rates are low. But as the UK's credit rating falls we are more and more vulnerable to interest rate rises in the future. And our credit rating has been reduced, which will eventually make borrowing more expensive.

UK Government debt is currently running at around £1.5 trillion with debt repayments each year of £43 billion. Those debt repayments will rise over the next few years until we find some way of closing the deficit. In short, we either need to spend less or earn more. And I don't see how we are going to earn more in the short to medium term as we throw ourselves out of the EU. Some think that the UK economy will be better off on our own. I really hope they are right because we are going to need it to pay off the mountain of debt that our kids are going to inherit.

Austerity is one of those really awkward policies. Yes, it is regressive. It hits the poorest more than it hits the richest. Yes, it throws people out of their jobs. But if you don't have austerity measures you can end up with mounting debts which costs more in the long run. The more reasoned question is how you implement austerity sympathetically and cushion people from the worst effects of it.

But how the hell do we explain all this to the populace? If they didn't understand the fairly simple question in the referendum we have no way on this earth of explaining austerity to them.

Has austerity ever worked in the real world?

James D. Macdonald said:

Has austerity ever worked in the real world?

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It has always worked for Germans and for everyone paying off loan(s). I'm being devil's advocate.

Concerning British austerity, I wouldn't worry much how much it would affect the economy because it's plain to see. The rest of the world will not come begging for trade deals with an island whose economy largely depends on financial services.

Life outside of EU will likely aggravate the fiscal policy. Today's amount of austerity which was projected to close the deficit and go into surplus by 2020 (as per George Osborne) will worsen and even the current budget will push the country further into debt. Reaction of the City is impossible to predict, but between status quo and worse possible scenario, the most realistic does not bode well.

Add to that that Scotland's budget deficit is three times higher than UK average, mostly thanks to falling petroleum prices, and you have a recipe for disaster.

James D. Macdonald said:

Has austerity ever worked in the real world?

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Yup.

http://www.bbc.co.uk/news/business-33470220

The problem with austerity is that if you don't do it you can end up with bigger debts in the future. That doesn't make it any less painful or regressive and everyone hopes for a pain-free way to get out of debt, such as through economic growth.

Alessandra Kelley said:

I had been wondering about that. My online acquaintances who support Brexit (I have a few!) keep talking about how the UK has the "5th largest economy" in the world as proof that it can weather this.

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Just like you, I've also heard plenty of arguments that "Germans will still want to sell us their cars" and "Greeks will still want to sell us their olives" and "we'll lose an awful lot but they'll lose even more because of the trade deficit" and "By golly don't you miss the times when we were allowed to buy perfectly good butter from New Zealand instead of France". But children's picture book about commerce and the intricate weaving of modern global economy are two quite different things. In other words, plain old wishful thinking.

And guess who is no. 1 by GDP per capita? The mighty Luxembourg with its indeed mighty financial sector. Talk about punching above one's weight. They most certainly don't entertain the idea of leaving the EU because everyone craves their grapes.

London's finance powerhouse will not evaporate over night, but it will be situated in a much less stable ground and therefore lose much of its appeal. Thin ice is not a desireable home for high finance companies.

There are possibilities, of course. UK could become, and I think it might, a tax haven in exchange for some sort of stability and thus set sails towards a future which is different kind of questionable.

draosz said:

London's finance powerhouse will not evaporate over night, but it will be situated in a much less stable ground and therefore lose much of its appeal. Thin ice is not a desireable home for high finance companies.

There are possibilities, of course. UK could become, and I think it might, a tax haven in exchange for some sort of stability and thus set sails towards a future which is different kind of questionable.

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Yes, I see that also (bold bit)

Funny how the UK Tory party's tough talk with EU over the last number of years was strongly driven by their determination to maintain the financial industry in London.

Oh, the irony.

Once! said:

The real reason that we have a deficit is because we are living longer.

How do you deal with a spending deficit? There are four basic choices - (1) borrow money, (2) reduce the cost of the state through austerity measures, (3) raise taxes or (4) have a stonking economy which makes more money for the state through increased tax income as we all get richer.

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(5) Logan's Run?

StuToYou


too sweeping tatement

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Myself, I like a sweeping tatement.