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Britain Ditches Austerity
Was Keynes right after all?
“The boom, not the slump, is the right time for austerity at the Treasury.”
John Maynard Keynes
U.K. Spending Plan, First Since ‘Brexit’ Vote, Is Expected to Shelve Austerity
LONDON — After years of tough spending curbs, Britain’s government was expected on Wednesday to bury the rhetoric of austerity, and to try to placate struggling working-class families who feel they have paid the price for the economic downturn that followed the financial crisis.
Help for workers whose low incomes are topped up by welfare payments, a raise in the minimum wage, and modest new infrastructure spending were expected from the first Autumn Statement from Philip Hammond, who became chancellor of the Exchequer, or finance minister, in July.
Changes are likely to be centered on a section of society identified by Prime Minister Theresa May as those “just about managing,” also referred to as JAMs, who are thought to have voted in large numbers for British withdrawal from the European Union, or Brexit, in the June 23 referendum.
Plans to finance construction of 40,000 new homes, and to provide more help with child care, are expected.
But there is a catch. For this group, as for others, the specter of Britain’s withdrawal from the European Union hovers over the economy. The uncertainties of the situation complicate life for Mr. Hammond and threaten to hit living standards just as they were beginning to improve for some.
Despite better economic figures so far than many had feared, growth projections are being lowered, and borrowing estimates and inflation forecasts raised.
A pledge by the previous chancellor, George Osborne, to balance the budget by 2020 has been junked. The statement on Wednesday is likely to outline what will replace that target.
We live in a time in which decent and otherwise sensible people are surrendering too easily to the hectoring of morons or extremists.