As Congress returns this week to attempt to hammer out a budget agreement, I remain very concerned about the situation across the Atlantic and how it might affect us here at home. But I'm not referring to the Middle East, though there is little doubt that what ultimately transpires in Libya, Syria, Yemen, Bahrain, and Egypt (let's not forget that things there are not settled yet either) will have serious implications for us as well. For the purposes of this blog post, I'm talking about Great Britain.
Over the weekend, there was a massive protest in London in response to the country's latest round of budget cuts. These were the steepest cuts since World War II, and one would only have needed to watch the parade into Hyde Park to realize it. In all, the Metropolitan Police confirmed that there were over 250,000 people marching through central London.
Unfortunately, the protests eventually turned violent. Splinter groups consisting of several hundred people broke off from the main march and began causing chaos. They scuffled with police officers, hurling paint bombs and ammonia-filled light bulbs at them. They tried to smash shop windows on London's main shopping avenues, threw objects at the posh Ritz Hotel in Piccadilly. and later broke into the luxury department store Fortnum and Mason, where they shattered some displays. Needless to say there were several arrests for public disturbances, destruction of property, and assault on police officers.
Remember now, this is Great Britain we're talking about here. This is not some third-world country where ninety percent of people are unemployed and so poor that they don't have electricity or running water. Rather, these events are unfolding in a country that is America's staunchest ally, a country that up until the 20th century was the world's most dominant superpower.
I've said in previous posts that I see the unrest in Europe as a pre-cursor to what will ultimately happen here in America. I so hope I'm wrong, but I still can't help but think that Europe is merely one step ahead of us. Let's take a brief look at what caused this to happen.
Prime Minister David Cameron's coalition government is proposing $130 billion in spending cuts to get their budget deficit under control. This deficit has come about as a result of billions in spending to bail out indebted banks, a huge reduction in tax revenue, and an increase in welfare bills. It's estimated that 500,000 public sector jobs will be lost, the pension age will have to be increased for those lucky enough to keep their jobs, and the portion of the population relying on welfare (unemployment) payments will see $28.5 billion cut from their programs.
Does any of this sound familiar? I think I know of another country that is dealing with a massive deficit after spending billions to bail out banks. They too have seen decreases in tax revenue, an increase in people filing for unemployment benefits, raises in the pension age, and are in the process of proposing deep cuts to government spending. Gee, I wonder who that might be.
Great Britain is a step ahead of us right now because our government has yet to come to an agreement on the 2011 budget. After the Republicans gained control of the House, there was talk of cutting spending by $100 billion. That number quickly dwindled to $61 billion, which is still pretty substantial. However the Democrats in the Senate countered with $10 billion in cuts, leaving the two sides over $50 billion apart and seemingly unwilling to compromise.
The latest talk coming out of Washington is that the two sides are close to an agreement. I'll believe that when I see it, but several members of the Senate and House have confirmed it. Needless to say it's quite comforting to hear such good news, but let's face it: no matter what the final number is, we're going to have a lot of unhappy people in this country.
The Tea Party is already talking about kicking John Boehner out and mounting a challenge against him in the next election. They are furious that he did not draw a line in the sand at $100 billion in budget cuts, and their ire will only increase when the proposed $61 billion is lowered even more.
The left will be up in arms over any significant cuts in spending, and a march on Washington seems unavoidable to me. They seem to be residing in a parallel universe where money grows on trees and the supply never runs out.
My best guess is that the final number will be between $30 billion and $40 billion, but most likely at the higher end of that range. That's far less than the $130 billion being proposed in Great Britain, so hopefully that will aid in avoiding the civil unrest that occurred in the streets of London.
We've already seen some major labor protests in Wisconsin, but they were fairly timid aside from some bullying of reporters and one Republican legislator who got caught up in a crowd of union supporters. I still say that more of these protests are on the way as states continue to ratchet up the anti-union rhetoric, but again I hope that they pale in comparison to what happened overseas this past weekend.
Be prepared for anything, my friends. In the coming months, don't be surprised if you read about throngs of people descending on state legislatures or the U.S. Capitol. Don't be shocked if you or someone you know loses their public sector job. Don't be caught off guard by your parents or grandparents seeing major revisions to their Medicare and/or Social Security.
But most of all, don't be anxious and worried. Let's face it; you and I can't control any of these things. We can't go back into the past and undo what has already been done. We are where we are, and we just have to move on as best we can. Let not your heart be troubled, and leave it all up to God. We'll make it through this. As Americans, we always have, and we'll be a better and stronger nation because of it.
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