Nancy Folbre, UMass Amherst economics professor, writes in the Economix blog about how the British government is dealing with its debt problems by imposing strong austerity measures which include cutting pension benefits and strictly limiting wage increases for public-sector workers. She says the cutbacks have stalled the economy and are sparking protests from middle-class and working people there. (New York Times, 12/5/11)
Cuts in public spending seem to reflect a divide-and-conquer strategy. Planned increases in unemployment benefits next year will be paid for by cuts in tax credits for low-income families.
Although the Cameron government insists that it remains committed to a longstanding British campaign to reduce child poverty, it has scrapped its plans to increase the child tax credit. Families with children in the lower half of the income distribution will be hurt most.
Opposition to the austerity program is growing. On Wednesday – just as I was leaving the country – public-sector workers staged the largest strike in a generation, closing more than half of all state schools, as well as many hospitals.
Protesters from Occupy London found their way to the office of the highest-paid chief executive in the country, Mick Davis of Xstrata, to brandish a banner reading “You get £18,426,105, we get austerity.”