The UK’s austerity policy is ideologically driven and is aimed at diverting finance from the poor to the rich under the pretext of the economic crisis, writer John Wight told RT.

Britain's Chancellor of the Exchequer George Osborne is announcing billions more in the government spending cuts while austerity measures are already biting for many people across the UK.
Osborne claimed that British economy is “out of intensive care.” RT asked Wight if he thinks that is really the case.

John Wight: Only in a fine world of the Tory party would that be the case. The country’s seen 1.1 percent growth in the last three years – the worst level of growth in this country’s economy over the last 100 years. That can by no means be considered a success. 

RT: Who's going to be the most affected by these latest cuts?

JW: Clearly the poor are going to be hit harder as a continuation of the mass experiment in human despair, which this coalition government has cheated to describe as an economic policy. It is ideologically driven and we see economics of the madhouse. And it is done with the objective of affecting the transference of wealth from the poor to the rich under the pretext of an economic crisis – not reason, it’s a pre-text. The economic crisis which hit this country in 2007 was their economic 9/11.

RT: Official figures show the deficit has been growing last year, despite previous cuts. So is there any point to them?

JW: Well, that’s what I’ve just said: this is ideologically driven. If you are considering these policies on the basis of economics, then clearly it is completely irrational. The US economist Paul Krugman lately described it as “a medieval doctor draining a patient’s blood,” and when that doesn’t work, draining more blood from the patient. This is entirely appropriate to describe this economic policy, this austerity. Austerity historically has been discredited. It doesn’t work in times of recession. At a time of recession the government needs to spend more to reintroduce the man which is contracted as profits stumble. And you must place this along the fact that the Office of Financial Statistics, the government’s own body set up to monitor these things, came up with a figure in April which stated that in the final quarter of last year UK businesses, excluding banks, were sitting on 318 billion pounds of surplus. And that money is money we need in the economy. They are not investing, they spend all the inducements from the government by the way of tax subsidies and tax cuts for the rich that the government has given to the rich over the last three years. 

RT: What do you think is the best way that the government can fight the deficit?

JW: It has to start investing in the real economy. It has to start directing banks to lend rather than pleading with banks, especially banks in which we own a majority share, such as RBS. The government should take over RBS’s operations and start lending in the interest of the real economy. The economy needs it. We have a housing crisis in the country, it’s the worst in the world, it’s a scandal. And we need to start investing in affordable homes. Rather than punishing the poor for being poor we should start actually diverting money from the rich to the poor, as befitting a civilized society. 

RT: Osborne announced cuts to the police budget. Do you think that will affect the crime rate?

JW: Well, not really, because based on what we know now a lot of criminals are actually in the police. They are also sitting in the boardrooms and in the House of Lords. It may have an effect. But I think they’ve consolidated the police and taken away the regional power from the police. It is yet to be seen. But as I say the cuts in the police budget are minimal compared to the cuts for the poor in terms of benefit cuts and so on.

Twelve US-based brigades will be deactivated by 2017 to fit a slashed military budget. Despite cuts of over 80,000 troops, top brass assures that combat readiness will not suffer because the remaining brigades will have more battalions and firepower.

Army Chief of Staff General Ray Odierno announced Tuesday plans have been approved to inactivate 10 Brigade Combat Teams (BCTs) with headquarters on the US territory. This comes under the $487 billion military budget cuts mandated in 2011 by the Budget Control Act, a fourth round of military budget cuts since President Barack Obama entered office.

It has been announced that the final cut of the service in five years is expected to be 80,000 service personnel, most of which is to come through attrition, Orieno said giving the difference from a wartime high of 570,000 soldiers to 490,000 by the end of 2017.

Overall drop in the number of BCT will be from current 45 to 33, as the US Army plans to return to about the same number of enlisted servicemen it had before the Iraq war started, it was announced at General Odierno’s press conference. 

A standard American infantry BCT currently has roughly 3,500 servicemen. The announced cuts, which are mainly to affect the active-duty force, could also be regarded as reorganization of the military, which has been conducting wars for the last 12 years. The Army Reserve will remain at 205,000 soldiers and the state-based National Guard militia will lose 8,000 soldiers, dropping to 350,000 from 358,000. 

‘Increasing tooth-to-tail ratio’

General Odierno explained that whereas the number of BCT is decreasing, the number of battalions in them will grow from present two to three thus increasing the Army’s “tooth-to-tail ratio.” Besides an additional battalion, which is usually 600-800 soldiers, BCTs will have more engineers assigned. It is expected that remaining brigades would be somewhere close to 5,000 personnel instead of the today’s 3,500 servicemen and women.

 “We will add a third maneuver battalion and additional engineer and fires capability to each of our armor and infantry brigade combat teams in order to make them more lethal, more flexible and more agile,” Odierno said. 

Reportedly, the decision to beef up the number of servicemen in a BTC came as a recommendation from commanders with combat experience in Iraq and Afghanistan. In their view personnel proliferation will extend fighting capabilities of the brigades on a battlefield. In this way the impact on combat power will be minimized and the savings will be made at the expense of support units outside of BCT and logistics. 

 General Ray Odierno insists the cuts were thoroughly calculated after thousands of hours of planning, personnel interviews and simulated combat tests. Naturally, because the brigades are slashed for economic reasons, the final selection was based on cost and logistic effectiveness, required training resources, ranges, airspace and infrastructure, as well as local economic impacts once BCTs are gone, Odierno said.

“I know in the local communities it will have its impact,” Odierno told reporters on Tuesday. “But we've done our best to reach out to them so they understand what the impacts are. We've tried to make it as small an impact as possible for as many communities as we could,” he said.

The deactivation of 10 BCTs comes as the first round of military reduction, because if the Congress does not reconsider austerity in military spending, the number of service personnel will be reduced even lower than the planned 490,000 troops.

A member of the Armed Services Committee, Democrat US Congressman Adam Smith warned that, “The real hazard to military effectiveness will persist as long as Congress fails to act on sequestration. If sequestration is not removed, then more extensive force structure changes will need to be made.”

The chairman of the House Armed Services Committee, Howard P. McKeon, promised his panel “will carefully examine the implications of this initial restructuring, but we all must understand that this is only the tip of the iceberg, much deeper cuts are still to come.”

Whether they will be accompanied by same ‘tooth-to-tail ratio increases’ remains to be seen. 

BCT Reduction by military installation

Fort Bliss, Texas – infantry BCT

Fort Bragg, North Carolina – airborne infantry BCT

Fort Campbell, Kentucky – infantry BCT

Fort Carson, Colorado – armor BCT

Fort Drum, New York – infantry BCT

Fort Hood, Texas – armor BCT

Fort Knox, Kentucky – infantry BCT

Fort Riley, Kansas – infantry BCT

Fort Stewart, Georgia – armor BCT

Joint Base Lewis-McChord, Washington – Stryker BCT 

In their effort to ‘end austerity’, France will cut spending for the first time in over 55 years, by $2 billion.

Prime Minister Jean-Marc Ayrault confirmed on Tuesday that the French Government will decrease spending year on year. The government is facing opposition from lawmakers who claim the deficit will be higher than expected this year.

"This is the first time that we will propose to Parliament such a reduction. It is a structural effort," said Ayrualt.

The central government will cut spending in 2014 by $2 billion to avoid unpopular tax rises and quell unsustainable spending.

750 million euro will be cut from central government support and 750 million euro will be cut from ministry budgets. Ayuralt said the government’s priorities would remain unchanged: job creation, education, and housing.

Opposition lawmakers like Gilles Carrez who heads the finance commission at the national Assembly, said in an interview to Le Figaro the government would miss its targets, and that deficit in the euro zone's second-largest economy could reach 4 percent in 2013. Carrez calculated this to be €20 billion higher than anticipated.

After pledging to cut France's deficit to 3 percent this year, President Francois Hollande and the Socialist government revised their predictions and updated their deficit forecast to 3.7 percent of GDP. 

 Hollande has not yet been able to deliver on his promise of 0.1 percent growth, on which he campaigned a year ago.

Hollande isn’t alone. Within the 17 member eurozone, only Germany and Austria have managed to generate positive growth, the rest are left in a similar predicament as France- slow growth, high unemployment, a looming triple dip recession, and a need to somehow cut more.

To reach their budget deficit goal, France should cut the public deficit to 3.9 percent of gross domestic product this year, then 3.6 percent in 2014 and 2.8 percent in 2015.

France’s economy officially slipped back into recession in May, after it shrunk for a second consecutive quarter. The IMF has forecast the economy will shrink 0.2 percent this year, more than the 0.1 percent initially predicted.

Hollande has done all he can to appear to fight the German dictate of austerity, even auctioning off presidential vintage wines to contribute to the endangered budget.

President Hollande at first stood with Merkel on austerity, but after being met by 30,000 protestors on the first anniversary of his inauguration, among slews of other protests, he has shifted his position to resonate with public opinion.

The President has asked China to increase investment in France, to create a balance in employment between the two countries, the head of state said at a speech at the Elysee Palace on Tuesday before members of the China Entrepreneur Club (CEC). 

"There is no fear in French society," Mr. Holland assured the entrepreneurs, inviting the Chinese to up their stake in French projects, LePoint reported. Four percent of foreign investors in France are Chinese, and the CEC generates 245 billion euros a year.

Irish officials has promised a state investigation into the 'arrogant' actions of Anglo Irish Bank, in which executives allegedly covered up their losses in order to secure large bail-outs from the government in the 2008-2009 financial crisis.

The Irish public must learn the full truth of how Anglo Irish Bank deceived government officials and nearly led Ireland to bankruptcy, Prime Minister Kenny told lawmakers Tuesday. "Believe you me, I understand the rage and the anger of so many people who have been affected by all of this," said Kenny.

The Prime Minister’s terse words follow a scandal that broke out after a leaked recording capturing a 2008 conversation of two senior Anglo managers was published by The Independent on Monday in which their plot to conspire to conceal the bank's true scale of losses was revealed. 

The internally recorded phone calls reveal how bank bosses misled the Central Bank of Ireland that Anglo bank required 7 billion euros to prevent its collapse. Anglo's losses reached 30 billion euros, nearly half of a total bank-bailout bill that forced Ireland to seek IMF bailout money.  

"I mean the degree of arrogance, the degree of hubris, the degree of couldn't-care-less-about-the-taxpayer, about the Irish people, that seemed to be part and parcel of the culture of that bank," deputy prime minister Eamon Gilmore said.

Gilmore said the tapped phone recordings could 'complicate' Dublin's negotiations in receiving crisis-relief funds.

“It makes it more difficult, of course it does, but we’re going to continue to work to get the best possible outcome for the Irish taxpayer,” Mr Gilmore said.

The parliamant's plan at present is to use €500 billion of the bailout money to recapitalize the country's banks, but the recent scandal may derail this vision.

The recordings contained lewd language in which two executives at the Anglo Irish Bank were recorded as they joked about their ability to convince lawmakers to invest in a bank they knew was failing, citing figures they had 'picked out of my arse' - with no plans on paying back the government. John Bowe, the head of capital markets for Anglo Irish, was recorded laughing as he explained to Peter Fitzgerald, the former head of banking, how Anglo Irish had fleeced the Irish government into providing billions of euro to keep the bank solvent.

The government will launch an investigation into the disastrous bailout of Anglo Irish Bank, which was the first bank to receive a government bail out which cost Irish taxpayers nearly $40 billion. Ireland has yet to fully recover from the financial crisis, and has been hit especially hard by austerity measures.

Mr Drumm and Mr Bowe joked with one another about the bank's strategy to attract deposits from overseas, in rather explicit language:
“So f***in’ what. Just take it anyway . . . stick the fingers up.”

Even though he knew their business wasn't solvent, Drumm encourage Bowe to seek deposits for a bank he knew was going to fail:
“Correct and right. So OK, so just keep nursing along . . . jack the [interest] rates up. That’s what I really meant, get the f***in’ money in, get it in,” he said.

The revelation that one of its national banks intentionally may have worsened the Irish economy in a time of national crisis, has shocked many.