CBS: Britain 'Gambling' With 'Massive Spending Cuts'
On Wednesday's CBS Evening News, anchor Katie Couric described British efforts to curb government spending: "Britain's new conservative government outlined the sharpest cuts in public spending in six decades....to see if that kind of severe belt-tightening can cure an ailing economy."
Correspondent Mark Phillips warned of the fiscally conservative approach: "It's a high-stakes roll of the economic dice involving massive spending cuts and huge job losses." He rolled a pair of dice onto a Monopoly board as he made that declaration. After detailing some of the planned cuts, Phillips explained: "The projected government job losses – 490,000, about one in ten government workers."
Phillips then fretted: "The British government is gambling that as the economy improves, private business will grow to make up for the government job losses. But critics say it's a risky bet and that the cuts could force a second recessionary dip and that the British pound may start to look like this." At that point, Phillips held up Monopoly money. He skeptically concluded: "Britain has now become a test case as to whether cutting a country's deficit fixes its economy or makes it worse."
Here is a full transcript of the report:
6:34PM ET
KATIE COURIC: It was the mortgage meltdown that touched off the worldwide economic crisis and many countries are still struggling to recover. Today Britain's new conservative government outlined the sharpest cuts in public spending in six decades, the equivalent of $135 billion over the next five years. Experts on both sides of the Atlantic will be watching carefully to see if that kind of severe belt tightening can cure an ailing economy. From London, here's Mark Phillips.
MARK PHILLIPS: It's a high-stakes roll of the economic dice involving massive spending cuts and huge job losses.
[ROLLING DICE ON MONOPOLY BOARD]
Necessary cuts, the government says.
GEORGE OSBORNE [BRITISH FINANCE MINISTER]: And we've taken our country back from the brink of bankruptcy.
PHILLIPS: A brink approach because of Britain's huge public deficit. More than 12 percent of its total economy, compared to a U.S. deficit of about 9 ½ percent. The cuts – Britain's Home Office, which oversees police and prisons, will see its budget slashed 24 percent. Education, down 3 percent. Transport, down 15 percent. Defense, down 8 percent. A cut so serious, 42,000 soldiers and civilians, that Prime Minister David Cameron called President Obama to assure him Britain could continue its war effort in Afghanistan. The projected government job losses – 490,000, about one in ten government workers.
The British government is gambling that as the economy improves, private business will grow to make up for the government job losses. But critics say it's a risky bet and that the cuts could force a second recessionary dip and that the British pound may start to look like this.
[HOLDS UP MONOPOLY MONEY]
ALAN JOHNSON [BRITISH SHADOW FINANCE MINISTER]: The deepest cuts to public spending in the – in living memory.
PHILLIPS: Britain has now become a test case as to whether cutting a country's deficit fixes its economy or makes it worse. Mark Phillips, CBS News, London.
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Comments
I Don't Gamble
Submitted by JustAl on Thu, 10/21/2010 - 6:57pm.
But if I did I would hope it would be with people like these dolts at CBS. To summarize, they consider the the plan of spending less in order to reduce debt, as a "gamble"?
Not only is one born every minute as the great WC pointed out, but many of them find high paying jobs in broadcasting.
Not to be overly sexist (one of my favoite terms from the '80's) but. . . would throwing Katie out the back door be considered a form of broadcasting????
For the record, that was P.T.
Submitted by Reaver on Thu, 10/21/2010 - 7:42pm.
For the record, that was P.T. Barnum.
Face/Palm
Submitted by JustAl on Thu, 10/21/2010 - 7:55pm.
Of course! I never get an even break. . . .
Wow. A bunch of left-wing
Submitted by rbosque on Thu, 10/21/2010 - 7:10pm.
Wow. A bunch of left-wing journalists know more about an economy than....economists? I bet they don't have a clue as to what a supply and a demand curve are.
Monopoly money, British can't print Euros.
Submitted by upcountrywater on Thu, 10/21/2010 - 7:36pm.
Oh we can (print our own money) and keep the US gov growing at 20% per year....
Aloha cash savings...
So a 10% US gov layoff is fair... What's that, about 9 million bureaucrats?
The DoE would be a great place to start...
You Didn't Build That.
The UK is not on the Euro...
Submitted by Francisco on Fri, 10/22/2010 - 2:50am.
The UK is not on the Euro... Their currency is the Pound, which they can freely print..Does CBS NOT think that
Submitted by WarEagle66 on Thu, 10/21/2010 - 9:38pm.
Does CBS NOT think that spending yourself into oblivion is also a gamble of sorts....?
Does the cash flow magically appear?
Submitted by samhermanmd on Thu, 10/21/2010 - 10:07pm.
Just having the power to print money does not mean the power of unlimited expenditure unchecked by limited revenue. Only too late will our own government realize this very fundamental concept. The Brits and the Euros are realizing too late that the well of tax revenue is not unlimited, and sooner or later it will run dry to the detriment of all of its citizens.
On one hand, the current
Submitted by Francisco on Fri, 10/22/2010 - 2:59am.
On one hand, the current british deficit is unsustainable and may threaten investor confidence, on the other, a large increase in the unemployment numbers will cause a large dent in aggregate demand, so the notion that it is a gamble is correct... from a supply and demand point of view, the effects of the loss of half a million government jobs are largely indistinguishable from the loss of half a million private jobs (which, most people would intuitively recognize, has a negative impact on the economy)...
The british must reign in their deficits quite soon (and cut some lard out of the government while they are at it) but the notion that they can do so without any risks or negative effects is naive at best...
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