Britain’s new conservative government came to-gether in an extraordinary manner just five days after an election that turned things upside down politically. While it is too soon to guess if David Cameron will be an effective leader of America’s closest ally abroad, the fact that a government was formed so quickly is another affirmation of democracy.
Not only was political power transferred from Labor to a coalition of Conservatives and Liberal Democrats without a shot being fired or, to the world’s knowledge, a blow being struck, there is some reason to hope that Cameron and his deputy prime minister, Nick Clegg, will be able to work together on the overriding challenge that Britain faces: How to cut spending and raise revenues sharply enough, quickly enough to move that country back from disaster’s edge.
America and the countries of Western Europe will be cheering them on and, for their own sakes, lending a hand. The fiscal challenge Britain faces mirrors that which stands in the way of economic recovery in all of the nations of the West — and that of Japan, as well.
Cameron campaigned on promises to cut spending. Clegg did, too, but said later, not now. The Liberal Democrats are to the left of the Conservatives and believe that government spending must stay high until economic recovery is stronger. Cameron and his party argue that it is already late to shut off the treasury’s printing presses and take the pain-causing steps necessary to reduce government borrowing.
The most hopeful sign that Cameron will prevail is that Clegg was willing to join forces with him and accept the deputy prime ministership.
Clegg may have been persuaded by the Greek crisis. It became necessary for Europe to put together a trillion dollar rescue package to keep its big-spending, low-taxing, members from bankruptcy. The lesson is that far too many governments have given away the store. In Greece, for example, workers can qualify for government pensions while still in their 40s and 50s. Six-week paid vacations are common. Housing is heavily subsidized. Tax exemptions are unsupportably high. Tax evasion is common.
Britain also has been generous to a fault to its people — and paid for the perks it lavished on them with borrowed money.
The worldwide recession and the credit crunch that set it off hastened the day of reckoning. To maintain the integrity of the major world currencies — the dollar, the pound, the euro and yen — the world’s creditors must be made confident that debts incurred will be paid. With interest. In real dollars rather than a flood of printed money.
To make this critically important demonstration, the nations that dug themselves into deep debt must cut spending and raise taxes to move themselves toward solvency.
Britain’s Cameron is fully aware of today’s imperatives. If he, Clegg and the people of Britain act quickly and prudently to begin the regeneration process, an example will be set and it will become easier for the rest of the profligates to be converted and follow.
The United States should do more than wish them luck. We should link arms and march toward fiscal sanity beside them.
— Emerson Lynn, jr.
