Wednesday, March 21, 2012

UK Conservatives (That's David Cameron's Party) Enact a Republican Dream Budget

If Paul Ryan were British, tonight he'd be having a the Queen Mother of all wet dreams - only it would be a reality, because today, the British Parliament, fronted and centred by that nice David Cameron and that Pillsbury doughboy (emphasis on the dough), roly-poly George "I've-Never-Worked-a-Day-in-My-Life-I'm-So-Rich" Osborne, forced through the budget for the coming year. A budget that would have sent most of our Teahadists into orgasmic paroxysms, and no Viagra would ever be necessary.

Here are some of the key points (see if any sound familiar to you):-

- The 50% tax rate for all high-income earners (that's the infamous 1 percent in our Amerian English) is cut to 45%. (That's right, folks, tax cuts for the wealthy).

- Corporation tax will be cut to 24%. (Again, who benefits from this? Right ... we know) By 2014, it will be cut to 22%.

If Paul Ryan and his mates were in the British Parliament, they would now be seen bending over in front of Georgie-Porgie-Pudding-and-Pie and firmly grasping their ankles in gratitude. All of these tax cuts, Gorgeous George reckons, will encourage those who have to invest in the economy and, of course, will act as incentives to create jobs ... in other words, trickledown. In fact, I almost gagged a maggot, listening to this tripe at work today, when Osborne referenced Arthur Laffer in his speech.

Wait, it gets better ...

- In households where one parent earns more than £50,000 ($75,000 in real money), child benefits are kaput.

- £5 billion pounds ($7.5 billion dollars as we know it) will be saved by freezing age-related government pension allowances on half of Britain's pensioners - and we all know that Britain is a country with an ageing population.

- There is to be a discussion on whether to raise the retirement and state pension age to 70, to take longevity into consideration. (Again, sound familiar?)

- A single-tier state pension will be introduced. Previously, a married couple got a slightly higher state pension, and a single person, a lower one. Now everyone gets £140 ($210) per week, and, yes, it's the lower rate.

- There will be premium help for video games and premium television shows, in order to entice Disney and HBO to make programs in the UK.

- Yet another airport will be built in the already-overcrowded Southeast (where I live), and its location will totally demolish an area of great natural beauty and a wildlife reserve.

- Gas prices at the pump will be raised. You're complaining about the possibility of paying $5 per gallon ... try $9 per gallon, which is what I pay in the UK. Now shut up complaining.

-£3 billion tax allowance (the equivalent of $4.5 billion) to be given to Western Scotland for - guess what? - gas and oil extraction. Drill, baby, drill ... and if you can't drill, frack.

- £100 million ($150 million) of government money to be allocated to ten cities - that's CITIES, urban areas - for the development of high-speed broadband and wifi ... nothing about the rural communities, many of whom still suffer the old dial-up modems.

Oh, and here's the real clincher ... yesterday, Parliament passed a bill that would change forever the structure and administration of that fabled icon, the National Health. Now, instead of having professional administrators control regional health authorities, various conglomerates of general practitioners from area to area will be given a budget and will be encouraged to purchase treatment and hospital care from private corporate health entities ... and, of course, at the forefront of this development is a name that will be familiar to many ... Humana, as in Bill Effing Frist.

As Larry Elliot, Economics editor of The Guardian expressed it:-

Even after the serial leaking, this was still a shocking budget. Shocking in the way it skated over the weakness of the British economy. Shocking in the way it ladled out still more pain to those dependent on welfare benefits. Shocking in the way it cut the tax burden for millionaires.

That said, this was – in its way – a skilful package of measures, which had greater intellectual coherence than the hotch potch of measures served up by George Osborne in last November's autumn statement. The politics of the budget were immediately apparent: try to secure broad support for the big concessions to business and the rich by helping those on lower incomes through an increase in the personal tax allowance. Leave it to Labour to worry about those who are unemployed or on the lowest incomes, who will not benefit from the income tax breaks. It was the way Nigel Lawson did it back in the 1980s.

This, though, remains a gamble and a big one at that. Lawson's big tax-cutting budgets of 1987 and 1988 took place when the economy was booming, real incomes were rising rapidly, house prices were going through the roof and the exchequer was overflowing with cash. None of that applies today, and while the forecasts produced by the Office for Budget Responsibility showed no further downgrades to the outlook for 2012 and 2013, there was no improvement either. The economy will continue to chug along in first gear this year, with even the expected 0.8% growth vulnerable to a fresh crisis in the eurozone or higher oil prices.

Seumas Milne, writing in the same journal, expressed what the budget meant a bit more bluntly. His entire assessment is worth a read and can be found here, but here are some of his more salient points:-

Shut your eyes and it's as if the last 30 years never happened. David Cameron and George Osborne are taking us straight back to the 1980s. If the leaks of the past few days are correct, Wednesday's budget is going to cut the top rate of tax for the richest 1%, while the minimum wage is reduced in real terms and public sector pay is hacked back in the poorest regions.

The class priorities really couldn't be clearer. Just as in 1979 and 1988, a Tory chancellor is prepared to court serious unpopularity to attend to the core interests of the party's most privileged supporters, while cuts in real pay, benefits, tax credits and unemployment drive down living standards for the majority.

It's a combination that reflects the classic conservative fallacy: economic incentives only work by increasing rewards at the top end and by reducing them at the bottom. But the difference this time round is that the Tories are cutting a popular tax on the rich with Liberal Democrat cover.

(snip)

Meanwhile, to add to the budget's retro feel, the government has been gripped by a new asset-stripping frenzy. The health service, schools, postal service, police and now roads are all up for sale, outsourcing and corporate cherry-picking.

The solution to every problem turns out, like a broken record, to be privatisation. Nothing, it seems, has been learned from the failure of an economic model that brought us to the brink of breakdown. For the urbane ideologues now running the show, this crisis has become a ready-made opportunity to shrink the state, shock-doctrine style, and hand over yet more ready-made markets to corporate monopolies.

(snip)

Crucially, none of what Osborne announces on Wednesday is going to kick-start an economy that is at best flatlining, stifled by cuts, starved of investment and consumer demand, and at risk of further debilitating shocks. And the evidence of the past 30 years is clear enough: any idea that cuts in corporation taxes or the top rate of income tax are going to deliver an investment revival without the prospect of renewed growth is trickle-down fantasy.

Escape from economic stagnation would instead need a serious boost to public investment and consumer demand, mobilisation of the state-dominated banks to drive recovery, and intervention to rebuild an economy hollowed out by City-first deindustrialisation and deregulation.

Not much chance of that from a government committed to austerity and a small state. But behind the coalition curtain are glimmers of recognition that the private sector won't pick up the slack from the state or rebalance the economy away from a bloated financial sector.

A lot of Republicans, I hear, were griping because on his last visit, that nice David Cameron didn't get to meet any of the Republican candidates for President. We know they all want to go back to the future ... well, Britain's just taken the first step.

And now the Catholic Church here is gearing up to fight against legalising same sex marriages, and in this country, prelates - Protestant, Catholic and Jewish - all have seats in the unelected upper house, the House of Lords, which can put a damper on any legislation enacted by Parliament.

Rick Santorum just ejaculated.

1 comment:

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