This is what a country, still being run by a right-wing political party, would look like during this global recession: UK pound drops immediately upon PM announcement of tax cuts for the rich

[jehurey 3,230]

U.K. in turmoil as government's gamble to solve economic woes fuels crisis, instead

New Prime Minister Liz Truss proposed tax cuts that sent shock waves through financial markets, causing the pound to plummet and putting her political future in sudden doubt.

 

LONDON — If anyone thought Britain was due a period of calm after Boris Johnson’s tumultuous premiership, no one told his successor.

 

The country was already facing an ugly menu of challenges. But the proposed solution by new Prime Minister Liz Truss has quickly sent the economy spiraling into chaos, threatening consequences both immediate and long-lasting for many Britons.

 

Her Conservative government's 45 billion pound ($48 billion) plan to slash taxes — particularly for the country’s highest earners — has sent shock waves through financial markets, causing the pound to plummet and leaving Truss' own political future in sudden doubt just three weeks after taking office.

 

After days of turmoil, the U.K. drew a rare stinging rebuke from the International Monetary Fund, which urged the government to "re-evaluate" a plan that may fuel already-soaring inflation and increase economic inequality.

 

The Bank of England, the U.K.'s central bank, made its own emergency intervention Wednesday, announcing it would buy up as much government debt as needed in an effort to restore stability.

 

The market reaction to Truss' plan sent government borrowing costs soaring, likely to be met with higher inflation and interest rates that will in turn mean more expensive credit cards and mortgages — even threatening a subprime housing crisis if people can’t make repayments. The nose-diving pound will also make everyday products in Britain more expensive as importers face spiraling costs.

 

The government’s argument is simple, in theory. It wants to supercharge Britain’s sluggish economy by any means necessary — even if that means short-term shocks.

 

These right-wing idiots are still peddling the idea that if you simply give rich people and corporations money, that they are just going to turn around and SPEND that money on giving new jobs to the middle-class......just because.

If business at a store has slowed down, and there's less customers...........give the store owner a TAX CUT, and he'll hire a couple of more store employees while retaining his existing staff, CLEARLY that's the natural thing they would do, right?

 

Many Conservatives now openly worry about the political optics of a plan centered on doling out cash to the super-rich during a cost-of-living crisis. Polls suggest the opposition left-of-center Labour Party has soared to leads as high as 17 percentage points, although an election isn't due to be held until early 2025 at the latest.

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‘Are you ashamed?’: Embattled British PM faces ‘brutal’ radio call-in gantlet

The appearances revealed boiling anger being felt across the country after the government announced a suite of unorthodox economic policies, including a tax cut for highest earners.

 

LONDON — With the United Kingdom’s economy in turmoil and questions swirling about her future as its leader, Prime Minister Liz Truss might have been expected to try and reassure an anxious country Thursday.

 

Instead, she spent the morning fielding angry, mostly written, questions on a list of local radio phone-in shows — a full hour of being berated in different regional English accents.

 

“Are you ashamed of what you’ve done?” one listener on BBC Radio Kent asked. “What on earth were you thinking?” a second from the coastal town of Birchington-on-Sea asked. “Have you taken the keys to the country and crashed the economy?” another said.

 

Truss spoke to eight radio stations in all, spending between five and 10 minutes with each. It was part of what was supposed to be a regular round of media appearances before party conferences — it just happened to land in the midst of a national economic crisis.

 

The new prime minister did not answer many of the questions directly; instead, she gave the same semi-scripted answers, often punctuated with notable pauses and silences.

 

What the call-ins did reveal was the level of boiling anger and fear being felt across the United Kingdom caused by a suite of unorthodox economic policies announced Friday, including a tax cut for Britain’s highest earners and freezing people’s energy bills for two years.

 

But after a week when Truss has seemingly vanished from public view, she did not offer a hint of a U-turn or an apology.

 

“People like it when politicians are honest,” Sarah Julian, the presenter on BBC Radio Nottingham, said as she opened her segment. “Why don’t you just hold your hands up and say, ‘This is a mess, we got it wrong and we’re going to do something different?’”

 

“This is like a reverse Robin Hood,” she added, contrasting Truss’ tax cuts for the wealthy to Nottingham’s folkloric hero who robbed from the rich and gave to the poor.

 

 

he says these “tough choices” were needed to spark growth in an otherwise sluggish economy. So far, these choices have sent the British pound crashing against the dollar, threatened to sink pension funds, drawn a rare rebuke from the International Monetary Fund, and forced the Bank of England to stage an emergency economic intervention to buy up government debt.

 

Reacting to the prospect of spiraling interest rates, mortgage lenders have taken hundreds of products off the market — amounting to some 40% of all mortgage offers — over the past week, according to the financial information company Moneyfacts.

 

ITV News’ journalist Paul Brand, who used to do these types of regional interviews himself, tweeted that he couldn’t “remember a more brutal round” of media appearances for a prime minister. While Dan Hodges, a columnist for the right-wing Mail on Sunday, which is often sympathetic to the Conservative government, called Truss “robotic,” “lacking in empathy” and “an utter disaster.”

 

For one host, James Hanson on BBC Radio Bristol, it was too much.

 

“Prime minister, with respect, that was the same scripted answer you’ve given to every BBC local radio station this morning,” he said, interrupting one of Truss’ stock responses. “The Bank of England’s intervention yesterday was the fault of Vladimir Putin, was it?”

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Can you imagine if Republicans were still running the federal government when this global recession finally unfolded? With Trump continuously badgering the fed to keep interest rates at total 0% (we were even floating the idea of going into negative percentages).

 

We'd have no tools to fight inflation, and Republicans would be screaming "MORE TAXCUTS! That'll get us out of this"

 

Thank god we elected actual competent people who started reacting before the shit hit the fan.

Edited September 29, 2022 by jehurey