It is impossible to ignore the Budget this week. It is the biggest item of the week in Parliament and is likely to affect us for years if not decades ahead. We are bound to ask whether the UK has learned the lessons of past recessions and whether the decisions taken this week are prudent or rash.
The lines of argument are very clear. The Government (Conservatives and Lib Dems – we still haven’t got use to the language of coalition) say that harsh cuts now are the only way of dealing with the deficit. The Opposition (Labour) warns that savage cuts which come too soon can reduce the growth that we desperately need in the economy.
In the UK we frequently object to comments made by US Politicians about matters that we regard as our business and not theirs but on this occasion I think that President Obama’s comments are helpful. No, I am not talking about his tirade against BP, though a Chief Executive who leaves the clean up to watch his yacht off the Isle of Wight appears determined to whip anti British feeling up into a real lather.
I’m talking about President Obama’s warning to our Government (and to the Conservatives in Germany too, by the way) that cuts that come too soon and cut too deep condemn the economy to long-term stagnation.
Getting our economy back to solid growth is what all side identify as the ultimate aim. The problem is that there are very different ideas about how to accomplish it. Some of the changes the budget makes will happen instantly and others will be phased in over time their impact will take longer to gauge, and even longer to correct if they prove to be wrong. What is certain is that the decision will affect everyone, one way or another.