Quote Originally Posted by wilisno View Post
I'm no economist, but I believe if you think these cutbacks are all good, and they will surely work, you are kidding yourself !

Think about the chain reaction !

With the cutbacks, household expenditure will increase, spending power will decrease. Demands of goods and services will decrease, leading to the increase of unemployment, all sectors will be hurt. All these will lead to the drop of tax revenue. At the same time, they will have to pay unemployment benefits to those extra job loss, including those cutbacks of public servants, 17,000 jobs ? By then, they probably will blame the world's economy for not being able to reach the forecast reduction of the deficit.

After years of neglect, by the time Labour gets back in office, they'll have to fix education, hospitals, infrastructures, etc etc. more importantly, make money, not just save money, it'll start all over again, going in circle ...
You're on the money Wilisno,

Consumer confidence drops because the government has frightened the bejesus out of the plebs. They tighten their wallets,
business cashflow stalls, they have to cut staff, so more unemployed and less spending money available, so cashflow tightens
more, so..... . It is an ever-decreasing circle until it dissappears up it's own arse ie. a recession.

Takes years to fix that.

WayneK.