Economics update: a special blog on public spending cuts, from John Birchall
In a move that resembles that used by the Canadian government in the early 1990’s the current Chancellor of the Exchequer has invited members of the public to suggest both their priorities for public spending and the areas they would accept it being reduced.
As teachers of Economics it might be interesting to discuss the ways in which the fixing of this ‘hole’ could be addressed.
Here are some numbers to help us use the blog as a way of deciding what might happen.
The receipts and outgoings of the current fiscal year and the estimated borrowing requirement:
The biggest areas of public expenditure:
If the above are protected ‘front line’ services then the axe will have to fall on those at the right of the following table
Oh and £43 billion is expected to be paid in interest charges on the debt – perhaps that might be ‘delayed’ or re-negotiated?
So, what would you do?