2011 is going to go down in the history books as the year of austerity. The textbooks will have to be re-written, as seventy years of economic wisdom is re-evaluated. In a crisis, the best thing to do is now is apparently to hunker down, and cut all unnecessary government spending. So this week the police in the UK were told that they were getting a pay cut. The campaign to save Britain’s libraries continues apace. There is less money for the armed forces, schools, the disabled. Charities are seeing their government grants and contracts evaporate.
Since we can’t fall back on Keynesian spending anymore, it’s business that will have to save us, so the only people who are doing better out of this are the corporations. Cutting taxes will, so we’re told, encourage more business activity here – presumably by taking it from others whose taxes are higher. There’s no guarantee that it’ll work, but the government don’t seem to have any other ideas to get us out of this hole (there are other ideas, here are some). And besides, the Conservatives were very clear about what they planned to do and plenty of people still voted for them.
So it’s nice to see that some people can laugh at the situation. Here’s a Canadian take on spending cuts that I found rather amusing.