Spending cuts will push up unemployment to almost 3 million

“Unemployment is not yet, but bids fair to be, the greatest of the British industries,” as was published in the Manchester Guardian in 1928. By the end of 1928, 1.2 million Brits were out of work. The national unemployment rate was 12.2%.

In Wales and in the north, the unemployment rate was 60%. Bad times hit the coal mining industry the hardest. In Northumberland, the unemployment rate was as high as 70% in some areas. [Source: The Year Of The Great Crash, 1929 – William K. Klingaman]

Around 1925 in Great Britain, 1% of the population owned nearly two-thirds of the national wealth.

On September 10,1931, the government issued an emergency budget, which instituted a round of draconian cuts in public spending and wages.

These austerity measures only worsened the situation, and by the end of 1931 unemployment had reached nearly 3 million.

After World War II, the Brits did not favor a conservative economic policy, so the people opted for liberal economic change. This post-war consensus would reign until about in the 1970’s. Margaret Thatcher would bring a much more conservative policy to the nation.

In 1991 there would be a recession in the United Kingdom.

On January 23, 2009, figures from the Office for National Statistics showed that the UK was officially in recession for the first time since 1991. Unemployment increased from 5.2% in May 2008 to 7.6% in May 2009. [Source: Wikipedia]

In October of 2010, Prime Minister David Cameron announced the biggest budget cuts since World War II. The controversial move will cost 725,000 public sector jobs. Opponents argue that the poor will be especially hit hard because of the cuts. And some have even branded the proposals as draconian.

The review will lead to an £81 billion cut in public spending in the remaining four years of the parliament, with average departmental cuts of 19%. In addition major changes in welfare were announced including £7 billion of extra welfare cuts, changes to incapacity benefit, housing benefit and tax credits and a rise in the state pension age to 66 from 2020. Public sector employees will face a £3.5 billion increase in public pension contributions. [Source: Wikipedia]

Richard D. Wolff, Professor of Economics Emeritus, University of Massachusetts, gives his assessment of economic implosions:

Here we have an explosion in Greece. Is there another country that is about to blow up? The answer might surprise you, it’s Great Britain, whose condition is worse.

When the Great Depression hit in 1929, the average level of debt of an American family was about one-third of its annual income.

In 2007, when the current crisis hit, the average level of debt of an American family was 130% of its annual income. We have no idea what that means. We have no past experience with anything like this.

The average level of debt of an average Britain family is 170% of its annual income. The British working class in record time outstripped the American, to become even more indebted than before.

The British government is borrowing quantities of money that no one has ever seen before; at printing quantities of money that no one has ever seen before.

And around the world, everybody who owns British pounds, every government, every bank, is thinking to itself – time to leave .