Grim, but perhaps unsurprising financial news emanated
from the United Kingdom last week regarding some serious public sector budget
cuts set out by the UK Chancellor.
They included: the loss of nearly 500,000 public sector
jobs, an average 19 per cent four-year cut in government department budgets, a
police funding cut of about 4 per cent and an increase in the country’s
retirement age. There were many other cuts proposed in addition to these. The move brought with it the predictable
nay-saying from the now-opposition Labour Party membership and employee groups
who talked about the cuts “hitting the frontline” of services and affecting
families – as they surely will.
However, Chancellor George Osbourne also made a point
that resonated – at least with us – when introducing the plan.
“It is a hard road, but it leads to a better future.”
It has been observed by many US economists that President
Barack Obama’s series of bailout packages earlier in his term may have served
only to delay the inevitable if the US economy did not start to grow sharply in
the medium term. It has not done so thus far from any reliable measurement we
have been privy to. Eventually, the US will have to take steps to reduce its
outrageous trade deficit and curb government spending as well.
Cayman is now faced with the same decision that the
Mother Country and our largest trading partner have had to make on their
government budgets. Basically it is this: Get punched in the gut right now, or
get hit with a crowbar over the head later.
It will be interesting, if not any great pleasure, to see
which way the legislature and the civil service choose to go.
No one likes to get punched in the stomach. It hurts.
But, in our view, it’s a lot better than a concussion.