What is fairness in terms of government spending cuts?

Post Reply New Topic

The UK has a large budget deficit, that stood at £843b in September last year, 57% of GDP (I got this from the Office of National Statistics). Other countries have national debt, and governments that are trying to cut public spending to resolve this debt. I'm wondering what people think constitutes a 'fair' cut?

In the UK, there is much talk on whether our current administration is cutting the budget in a fair way. The BBC ask this question of government ministers every day. The newspapers ruminate on the matter constantly.

It's my opinion that there is no such thing as a 'fair' government spending cut. Our current government's cuts seem somewhat arbitrary. A cut on eye-surgery in hospitals here. A cut on naval defence there. A raising of the retirement age. The only thing, I suppose, that is fair, is that they hurt everyone - even though the Institute of fiscal studies say proposed cuts to welfare benefits hurt the poorest the most.

A measure of 'fairness' given by the media is whether the cuts affect disproportionately the poor. The government's counter-argument is that these cuts help to ease welfare-dependency. Another measure is whether the people who created the financial crisis are hit. There has been talk of a 'Robin Hood Tax' on banks and hedge funds, but the proposed tax is small. The government say they can't tax the bankers, or they will go abroad. That is actually a real problem and it has happened before.

I think there's a problem with the concept of fairness in politics. Politics is the balancing of competing interests and thus can't be fair to everyone. If Labour stayed in power, their spending cuts would not be 'fairer' - simply influenced by a different ideology. The ideology of most of the British Conservative party, since 1979, and at times before that, has been to have a small state - pretty much for its own sake. I don't like that ideology. How the Conservative party (it's not really an effective Lib-Con coalition) cut the budget will be influenced by that ideology. That is my gripe with them, not their lack of fairness.

I'm interested in hearing how people from different countries perceive their government's response to national debt.

Debt to GDP ratio is 57%? Why, that's a mere bagatelle. It was more than 200% after World War II and what happened? The National Health, council housing, the Beveridge Report recommendations implemented.

Yep, I know. Both parties have a different ideology, now. Well, the Conservative party's ideology has sort of always been a bit like it is now, which is why I have more of a problem with them.

Government attitudes towards the public have changed so much since the mid-20th century. The fact that we're no longer seen with quite the same level of essential dignity is a problem.

That said, our debt per GDP is tiny when you show it historically, but it is fairly large on a current European scale (but not the biggest). I support some rethinking of government spending, but the current administration seem almost gleeful about it.

One thing's for sure: the Conservatives put the "n" in "cuts"

But seriously, though, they're doing what has to be done to but the massive deficit Labour ran up. They had to cut benefits because it's where Labour spent a lot of the Budget. It's not going to be easy or nice, and people probably won't think it's too fair either, but the fact is, recovery from the recession is important, and a country without a massive debt is a lot more likely to have a successful economy.

At least the UK is talking about what cuts should be made. Here in the US everyone is yelling "we need to cut spending" but when asked "what shall we cut?" - silence. I'm actually rather confused by seeing "fair" and "politics" in the same sentence. Personally I think our national defense budget would be a good start, but that's just my opnion.

International Aid, and the EU. Quit paying those and we could spend some time actually making the benefits system fair and balanced, and maybe even have some planes to put on our aircraft carriers. Maybe we could even splash out on some crew?

A recent study published in the UK has concluded that the best way to improve debt to GDP ratio is more government spending. They tracked government spending and debt to GDP ratio and this pattern has been constant. Cuts in the budget cause a deterioration of Debt to GDP whilst increases improve it. The stingy and tight money policies of the late '10s and '20s put debt to GDP through the roof and effectively killed the British Empire. It's ironic isn't it that conservatives and their policies sunk their beloved Empire.

Certainly some cuts need to be made, but not to the extent and in the way that the Conservatives are doing it. There are certain things that I do consider fair. For example, raising of the pension age (and particularly raising it for women to be in line with men, something that was never fair before) is fair because life expectancy has increased dramatically since the current age of retirement was established, and that is not sustainable. Of course, life expectancy for manual workers is less than for white collar workers, and such jobs take physically much more toll on the body, so perhaps pension ages should be variable to take account of this and to be truly fair.

In general, cutting public spending on things such as education, health and social care will affect the poor more than the rich. I do welcome streamlining of benefits to make the system less complicated, and in theory making it worthwhile for everyone to work rather than not work is a good idea (with a graded system of benefits added onto earnings), but I do worry about those who cannot work through ill health or disability who have to jump through hoops (or rather the inverse) to claim their benefit and then will always be the poorest in society despite this. I would welcome more flexible working - both for families but also for people with poor health - having a job does give you self esteem and a sense of purpose and most people can do something. However, private companies are just not set up to be able to employ people who may only be able to work erratic hours (when they feel well), or be unable to do certain tasks, and the cutting of public funding for activities etc. for such people is only going to reduce their quality of life further.

In theory VAT could be a fair tax (taxing luxuries), but in practise it is paid on essentials such as electricity, clothes and equipment that people cannot do without, so ends up hitting the poor more than the rich.

What is fair? Getting the super rich to pay their taxes (not even excessive taxes, just the same as the rest of us pay) would generate a huge amount of income and would be completely fair. Given that we effectively own several of the banks now, getting them to pay more into the recovery of the economy would be fair. Cutting tax breaks for large corporations (and using the money to support small emerging businesses) would be fair. Cutting spending money on the excessive surveillance society that has developed in Britain would be fair. Introducing a graduate tax instead of tuition fees for university (which put off poorer students) would be fair (yes those of us who got our education for free would have to start paying for it now, but that is fair). I would go further and say that inheriting vast sums of money/property is unfair and promotes wealth over ability, but I do realise that there are significant problems with trying to do much about this, particularly in one country in isolation.

In America nobody talks about "fairness" because fairness is for sissies. What's the matter, you want a government hand out? Bah humbug! You ain't gettin none of my hard earned tax dollars! If you've got a problem then either you're not working hard enough or you're defective/unfit for survival and should simply be eliminated. If you're unemployed and homeless you should get off your lazy ass and start shovelling s**t for someone because s**t needs to be shoveled somewhere. Never mind that there aren't enough jobs to go around. The way to lower the unemployment rate is to stop enabling the unemployed by giving them handouts. If you work hard enough at scamming and financial shenanigans maybe one day you will have a multi-million dollar stock portfolio like me! You might even be able to make a large donation to the Republican Party.

This is the platform of the guy running for governor of my state (PA). He's ahead in the polls.

Keynesianism is a horrible dirty word nowadays, but the theory was developed to cope with times like this.

I think the Conservative party is a mix of old-fashioned fiscal tight-fistedness, and a more modern type of university monetarism. They are all about ideology, they have no sense of economic pragmatism, despite whatever propaganda they spread to the contrary.

I remember during the election campaign, when it was almost a competition to see who could sound more hard-ass by making the most 'swingeing' cuts. Gordon Brown was the only one saying he would put some money into rebuilding the economy, but people were sick of listening to him by then. They treat the British public like they don't want to consider such things, which I fear, may be true. People have been turned into talking heads on the news to come out and say, 'well, we all need to tighten our belts.' When the question of encouraging economic growth gets raised on Question Time, some Conservative figure says, 'the private sector will pick us up', and then David Dimbleby promptly dismisses the matter.

People around the world say Americans are dumb, but seriously, I have doubts about the British ability to think long-term and big-picture about anything. National debt as % of GDP is about 72% in Germany, yet the German economy is doing better than ours. They plan things in Germany. They have government investment in infrastructure and technology. They don't just run in there with a financial sledgehammer. National debt is at 78% GDP in France, but people there have enough self-respect to wreak havoc when they get told to retire later.

And back to the whole notion of the private sector saving our bottoms. What private sector? Most decently-sized private companies in this country are in the public pocket in some way. We have call centres and shops, yes. The latter aren't doing so well. It's takes quite a bit of investment to reindustrialise the country. The Conservatives won't invest in very much.

Last edited by puddingmouse on 22 Oct 2010, 2:52 pm, edited 1 time in total.

The government is increasing international aid, because, call me cynical, it makes them look good on the world stage. Like millionaires at a charity gala, who then go to their accountants and diddle their taxes. It's the governmental version of that.

What makes International Aid even more ridiculous is that we give aid to India, a nation that has a nuclear program, an extensive military, and a foreign aid program of its own.

obviously the problem is all those damnably unemployed people refusing to take all those excess jobs in PA. ....oh wait, i think i need to hit myself in the face with a shovel a few more times before that makes sense.

Here is another ridiculous cut. The Navy just towed our first class brand new hunter killer submarine off a sand-bank with a tug they want to cut. Genius.

don't be so hard on yourself, england, we all crash really expensive stuff into stuff from time to time.


that's pretty awesome if the tugger is slated to be cut, though.

it's almost as if the governments of the world have become enraged at all the jokes being told about them and have decided to outfunny the funnymen.