After ‘Cuts’, Collapse

In Britain the government is cutting services by as much as a claimed 25%. The idea is to balance the budget over the planned term of five years. But what happens if tax revenues just keep falling and don’t recover, as the plan assumes?

The future in those circumstances would not be too great for public servants, if events in California are anything to go by. There town halls and municipalities, hit by collapsing revenues, are actually closing down completely, no schools, no police, no nothing.

If services are needed, they call private service providers. This saves money, sure, but the communities that once had their own schools and police, now have mercenaries, who will only give service as they are paid, within strict budget limits. This could come to Britain, of course, if the ‘25%’ cuts don’t balance the budget, and if money cannot be borrowed at low interest rates.

FT Report.
EXTRACT – The small southern California city of Maywood has hit on a unique solution to its budget crisis. Crushed by the recession and falling tax revenues, the city is disbanding its police force and firing all public sector employees.

Maywood has opted for an extreme solution, by contracting out all public services, including the most basic, to save cash. But it is not alone.

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