The debts are going to have to be cut one way or another. The reasoning behind this is as such:
A country's economic status will, if left to its own devices, fluctuate up and down, while following a trend rate. This will cause the general standard of living in the country to flucutate up and down in accordance.
One of the most important things that a modern government does is to try and remove these flucutations. If these fluctuations can be removed, then people can be more confident about the future, so they will be more willing to invest in the future, so the trend rate of growth in the country will increase. This is desireable.
In order to do this, the government will, in theory, borrow and spend when the economy is below the trend rate, and tax and cut when the economy is above the trend rate. That is the theory. In practice, however, this does not happen.
Whomoever is in power will want to stay in power. They will therefore try to make the general public happy with their performance. Since people are greedy, and short-sighted in their greed, they must provide a short-term benefit to the people to gain votes.
When the economy is below the trend rate, the government will be more than happy to borrow and spend - It increases the standard of living in the country, which makes them popular and more likely to stay in power. It also create the illusion that their policies are more successful than they actually are. They can justify it, by saying that they will pay for this debt when the economy is doing better.
This is not often the case. When it comes time to pay it back, people are very reluctant. Paying it back means that people will have to undergo a lower quality of life than they would be able to achieve otherwise. Due to short-sightedness, people forget that the times of prosperity they previously enjoyed were because they would have to start paying it back.
When labour come into power, they were due to start paying back the debt that had accumulated. But they did not. They borrowed more and more, and as a result, the quality of life did increase, and labour were seen by many as a very effective governmental party. People did not realise that they would have to lower their standards of living, and a great many still do.
It's true that many people will be hit hard by the new budget, and the poorest most of all, but this is only because the labour government brought them so far above the sustainable level. If labour had not brought these people above the sustainable level of living, then they would not have to come down, and indeed their long-term standard of living would be higher.
Of course, people are short-sighted, and the politicians manipulate that. No doubt, in five years time, there will be many labour MPs showcasing the drop in quality of life in the coming years as 'proof' that they are the best party, and try to use that to be elected.
The really sad thing is that lots of people will fall for it, and indeed many people have fallen for similar things in the past.
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Topic: UK Emergency Budget = A Mess (Read 1367 times)