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Picadilly Circus Chainsaw Massacre marzo 4, 2010

Posted by Lodovico Settembrini in El Reino de este Mundo.
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Solía pensar que si existiera la reencarnación, me gustaría regresar como el Papa, o el Presidente…, pero ahora querría retornar como el mercado de bonos. Podés intimidar a todos…

Cuts of that magnitude have never been achieved in this country. Mrs Thatcher managed to cut some areas of public spending to zero growth; the difference between that and a contraction of 16 per cent is unimaginable. The Institute for Fiscal Studies – which admittedly specialises in bad news of this kind – thinks the numbers are, even in this dire prognosis, too optimistic. It makes less optimistic assumptions about the growth of the economy, preferring not to accept the Treasury’s rose-coloured figure of 2.75 per cent. Plugging these less cheerful growth estimates into its fiscal model, the guesstimate for the cuts, if the ring-fencing is enforced, is from 18 to 24 per cent. What does that mean? According to Rowena Crawford, an IFS economist, quoted in the FT: ‘For the Ministry of Defence an 18 per cent cut means something on the scale of no longer employing the army.’ The FT then extrapolates:

At the transport ministry, an 18 per cent reduction would take out more than a third of the department’s grant to Network Rail; a 24 per cent reduction is about equivalent to ending all current and capital expenditure on roads. At the Ministry of Justice an 18 per cent reduction broadly equates to closing all the courts, a 24 per cent cut to shutting two-thirds of all prisons.

Interesante mirada sobre la crisis económica en Britannia, pero que comprende lo que está sucediendo en el resto del Viejo Mundo, en la nueva edición del London Review of Books.

De cómo la lógica del ajuste se les impone a todos – incluso a Gordon (que siempre nos cayó muchísimo más simpático que Tony) – y los números que manejan – y se honra la lógica, pero que nadie cree posible en un marco democrático – el ajuste tatcheriano aparecería al lado de éste como hecho por un populista de izquierdas –

So why all the posturing about the deficit? ‘I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter,’ James Carville said in the early years of the Clinton administration. ‘But now I want to come back as the bond market. You can intimidate everybody.’ It is the bond market, more than anything else, which is currently forcing the government to pretend to take the deficit seriously. This is one of the reasons for the tensions between Gordon Brown and his chancellor. Brown is allergic to the word ‘cuts’. He clearly experiences actual physical difficulty with the term, for good reason, since it does a lot to invalidate most of what he’s done in office over the last 13 years. Darling, on the other hand, has to placate the markets, and they demand a higher degree of fiscal rectitude from the UK, which means lower spending and higher taxes. If Darling doesn’t look convincing, there will be a ‘buyer’s strike’ and nobody will want to buy the many tens of billions of pounds of debt which the British government is going to have to issue over the next years. If that happens, the government will have a very serious problem. You can lie to the electorate, but you can’t lie to the bond market, which is why there will certainly be cuts, severe ones – just not quite as severe as the Texas Chainsaw Massacre scenario implied in the budget. These constraints on action are going to be in place whoever wins the election.