TAKING ACTION IN BRITAIN – AT 9:03 A.M. ET:  The numbers here are really stunning.  Britain is taking drastic action to rescue its economy.  There is going to be a lot of resistance, and possibly street action, but this may turn out to be a model for the U.S.:

LONDON — Britain’s Chancellor of the Exchequer unveiled the country’s steepest public spending cuts in decades on Wednesday, sharply reducing welfare benefits and eliminating almost half a million public sector jobs over the next four years as the country seeks to free itself of crushing debt from the global financial crisis.

“Today is the day when Britain steps back from the brink,” George Osborne, the Chancellor, told Parliament.

“It is a hard road but it leads to a better future,” he said, but “to back down now would be the road to economic ruin.”

He said that 490,000 public sector jobs would be lost over the four-year savings program and the size of government departments in London would be cut by one third. Public spending would be cut by a total 83 billion pounds, or around $130 billion, by 2015.

He promised savings of an annual 7.1 per cent in the budgets of local councils and said there would be a freeze in tax funds allocated to maintaining the royal household of Queen Elizabeth II. Public housing tenants, he said, would face higher rentals closer to the market rates for private housing. Defense spending would be cut by 8 percent by 2014, he said, but promised not to reduce spending on British forces in the Afghanistan war.

COMMENT:  The defense cuts are highly controversial, and the one thing we would doubt.  Both Secretary Gates and Secretary Clinton have raised questions about those cuts, as the U.S. would have to take up any slack left by the Brits. 

Some areas, like health, would actually get more money.  The real shock is the cut of 490,000 public sector jobs.  We simply must address the fat public payroll here as well. 

As readers know, there are ongoing riots in France over the plan to increase the retirement age from 60 to 62.  There have been riots in Greece over belt tightening.  But at least countries are taking action. 

October 20, 2010