Only Republic of Ireland seems to be serious about deficit.

It seems that only the Republic of Ireland is serious about reducing its fiscal deficit. Developed countries like the United States, United Kingdom and Greece are hoping that economic growth will turn up. However, they are allowing their policies to be dictated by the credit rating agencies. In yesterday's Sunday Times, Irwin Stelzer was scathing about the public sector liabilities being built up in the U.S.
Here, in the UK we share problems such as underfunded pensions.
I don't think the Irish actual cut in public sector wages will be replicated in the UK, which seems to want inflation to do the job.
Stelzer's fellow commentator David SmithHe describes UK Chancellor Alistair Darling as a Jekyll and Hyde character, who compared to his pre PBR briefings to journalists, did the actual opposite in the
statement. Public spending and the fiscal deficit will go up rather than down in the medium term.
From filling your car with petrol to running a small business, we are obviously not an under-taxed nation. I think it is implicit in Labour's thinking that difficult issues such as the possible spiral in public sector borrowing will not happen. Or it could be resolved by scrapping Trident and taking a less-demanding role on the world stage.
In today's Daily Telegraph, Roger Bootle, says the UK does have the advantages of a flexible labour market and exchange rate depreciation. This allows us to gain competitiveness without the future years of painful deflation for
Ireland. Although the UK does have the problems of its public sector and state education system.
I think that the Irish might have to admit defeat and pull out of the euro. Depression would endanger the gains made by the country recently. Greece says it will not go down the route of wage cuts but the markets will probably make some kind of decision for it. The smaller economies in the EMU could have handled the single interest rate better but that is in the past.

Gordon Brown launches public sector effiency drive.

British Prime Minister Gordon Brown has promised another public sector efficiency drive just before his Chancellor Alistair Darling unveils the Pre Budget Report (PBR)
aimed at plugging our £175bn government borrowing deficit. In his previous incarnation as Chancellor, Brown used to raise the tax burden after the election was safely out of the way. However, Darling apparently wants to be more candid about the fiscal position. This will need a combination of tax rises and spending cuts. Given the sums required I suppose we will be talking about income tax and VAT as well as spending cuts hitting the big budgets of education and health. Gordon's stealth taxes, such as on pensions
and Conservative-led councils, will not be enough.
The independent think-tank Reform considers that the 6m public sector workers will have to be reduced by 1m. This is probably politically impossible unless the United Kingdom has actually gone bankrupt. Yesterday, Gordon was warbling about the capacity of government to do good while outlining measures to relocate civil servants from the south-east of England. Apparently, this would save on property costs. However, this would just increase the region's mismatch between its tax contribution and what it gets back from the public sector. I suppose Labour would want to relocate English civil service jobs to the devolved regions of Wales and Scotland to shore up its votes (ONS in Newport?).