Britain's finance minister is due to present a budget. Much of the chatter this non-event evokes concerns the need for fiscal responsibility, curbing deficits, thinking even about paying down debt.
But this is twaddle.
Western economies are mired in debt because Keynesians avow the absurd belief that deficit spending during a depression, as now prevails throughout most of Europe, will restore full employment in open economies with a minimum wage of five, ten, or twenty times the basic wage paid throughout most of the third World.
This is fuddle duddle and bunkum, but it means that debt is not, according to the official line, the problem, it is the solution.
But the more Britain and other Western nations stimulate, the more cash will flow offshore for the purchase of very cheap foreign-made stuff, and the more the trade deficit will balloon. Unemployment will hardly be touched except through unsustainable expansion in the public sector and the retail distribution of mainly imported goods including the foreign made components that make up most of the added value of domestically built cars, computers and other high-tech products.
In fact, unless we are to assume that governments are run by dolts and morons (a possibility that cannot be entirely excluded), driving up the trade deficit must be the objective, as it is the inevitable result, of US and European policies of fiscal stimulus.
At some point, as trade deficits explode, the Renminbi:dollar peg will fail and the mighty dollar and the already sinking Euro will plunge in value relative to the currencies of Third World nations with trade surpluses. At that point, all the wonderfully cheap stuff and all the wonderfully cheap offshore services provided by four billion third-worlders employed, heretofor, at a small percentage of Western wages will suddenly become unaffordable expensive in the West.
The sooner this happens the better it will be for the tens of millions of unemployed Americans and Europeans. In the meantime, take a look at corporate profits: they're at all time highs, reflecting the low cost of offshore labor and the depression of wages in the West due to high unemployment and mass third-world immigration.
So, yes, the budget to be introduced by Britain's Chancellor, George Osborne, will fail totally to address the problem of budget and trade deficits, but a Chancellor's gotta appear to be doing something.
Meantime, folks should get used to the fact that to compete with the Third World, Third World wages are necessary and therefore inevitable.
And what that means is that if you're not one of the one percent, your standard of living will soon be a whole lot lower.