No Social Welfare, and No Jobs

Lest anyone feel that I am a bleeding heart liberal and a priori am against the coalition government in the UK I should like to once again stress that I am seriously impressed with the cuts that they have announced in terms of the amounts cut-just somewhat concerned with the effect they will have on an already grumbling proletariat.

With some exceptions the USA has always prided itself on the fact that instead of a wide-reaching social net it offered Yankee ingenuity which professed that in the land of infinite possibilities those that wanted to could and would climb up the economic ladder.

I say with some exceptions as the chances offered some ethnic groups were sometimes seriously limited and in times of severe economic dislocation even the most capable could be crushed under the wheel.

There are many theories/explanations offered as to why the USA has proven to be so resilient and flexible-indeed many would maintain that flexibility, which essentially means free trade/anti regulation, is the key to American success.

But this is not my focus today.

The European Model has evolved out of a much more formal Class System. From those beginnings there arose the idea of a Social Contract, which periodically is abused by all the various class groupings at one time or another. Through many trials and tribulations it has developed into a Social Market Economic structure.

Now in the UK the sense is that the system has gone too far in the direction of the social aspect. The Public Sector in terms of employment and in terms of Social Welfare spending is held up as the cause of the huge budget deficit, forgetting the costs associated with the bailouts of the financial system.

So the new Austerity Budget has decided to aggressively attack the Deficit through the means of cutting Social spending and downsizing the Public Sector, and increasing CGT and VAT.

All good. Those on Social Welfare should get up and go out and find work. The swollen ranks of the Public Sector should leave their cozy bureaucracies and go and get "real" jobs.

All good. But where are the jobs? Manufacturing is dying a slow death. New technologies require highly skilled labour, and very little of it at that. What's left is the Service Sector.

Services require people who can pay for them. And that's where the problem arises. The UK has a hierarchy of services with Finance at the top. In the good times everything works. Now the finance industry has been a drain on the overall economy, and by extension is creating the ripple effect of unemployment throughout the system.

So I think the Austerity Budget is great on paper- I just don't see where the employment is going to come from.