There are a few things, which the IMF concerns around the savage cuts proposed by the ConDems, raise. For one, the LibDems argument that we are somehow facing a Greece like situation is utter rubbish, and a pathetic attempt to hide their true desire to wreak havoc with public spending and people’s lives. If we were truly like Greece, the IMF would be supporting the decisions in the budget, as there are exemplars of austerity and the economic model that Greece are adopting in order to gain help from the IMF.
Secondly, the IMF is rather contradictory, consider the following from a Guardian article by Larry Elliot about the IMF’s tax:cuts ‘ideal’ ratio:
“The broad outlines of the budget are as follows. Osborne thinks the problem with the public finances is that spending is too high rather than that taxes are too low. Accordingly, he would prefer to cut £4 in spending for every £1 he raises in taxes, which is the ratio proposed by both the IMF and the Organisation for Economic Co-operation and Development.”
Thus, the IMF themselves propose high public spending cuts in contrast to higher taxes: something progressives rightly would argue is counter productive and regressive, as those most able should be the ones who are paying the highest share – especially seen as some of the most able are the reason why we are in this mess in the first place.
Furthermore, the IMF have said that one of the biggest reasons for the debt is the decline of economic activity and the related reduction in tax revenue – so who knows why they and the ConDems seem to think that savage public spending cuts will create more economic prosperity, as they miss out on the chance for higher taxes on the richer to balance the economy. Instead, the economy is being further skewed (what is claimed to be ‘balancing’) towards the private sector interests, and only making the situation worse.
Moreover, huge scale job loses will not help with increasing economic activity, and will only increase social security spending. The economic logic behind the budget is unbelievably flawed. But there again there is no economic logic, it is just ideological desire.
There is no wonder that the Treasury and Osborne obviously put pressure on the OBR to revise their unemployment projections to a more modest total and closer to Labour’s projections – political point scoring with people’s lives.
The IMF seem to have a few contradictions, especially now they are preaching about the UK’s cutting whilst they are overseeing disastrous austerity in Greece. However, it does add to the already large body of intellectual and respected (I say that lightly) criticisms against the cuts, and the problems they are set to impose on the economy growing again.