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Budget for Transition

PaulS's picture

Budget for Transition

Well, the 2009 Budget really is staggering:
· Projected slump this year of 3.5%
· Resulting in new Government debt for 2009 of £175 billion, or 12 % of GDP – more than any other major economy (8.9% in the USA, 6.2% in France, 3.2% in China)
· Thus doubling the total of our debt to estimated £1.7 trillion, or some 80% of GDP
· which may take till the year 2032, amazing 23 years, to repay just to reach the current levels of debt!

And if that wasn’t bad enough:

· The current GDP drop is already 4.1%, making it highly unlikely, two days after the budget, that the damage can be limited to the projected 3.5% drop.
· Most commentators, incl the IFS (Institute of Fiscal Studies), dismiss the projected growth for 2011 plus as fantasy.

So, inevitably, the annual increase in debt will be worse and the total debt absolutely horrendous, certainly over £2 trillion.

And that’s not all.

What no politician, commentator or ‘expert’ has taken into account is that there will be NO RECOVERY !

Why not? As soon as world recovery begins to look at all likely, the price of oil will once again skyrocket to the 2008 levels ($148/barrel) and higher due to oil fields depletion, leading to an overall decrease in production from 2009 onwards. That will be followed, just like in 2008, by steeply increasing cost of fuel, energy, food, utilities, etc which will kill any such recovery before it even begins.

Here in the UK the situation will be even worse. Since we will from now on be labouring under the highest burden of debt of any so called developed country, we will be one of the last to start recovering. However, the price of oil is not governed by the state of the UK recovery, but by the state of the World recovery. Hence oil will start going up while UK will still not have bottomed out. Any UK recovery will thus be killed off before it even begins.

To summarise, we are all taking on debt that will take 23 years to repay, provided we have a strong recovery, but we will have no recovery. Can countries go bankrupt?

There were a few positives in the Budget:
· Britain commits to cut carbon emissions by 34% by 2020 (I suggest mainly because by 2015-2020 UK will not be able to afford to buy the energy it uses now and will have no choice but to reduce consumption)
· An extra £1bn to help combat climate change by supporting low-carbon industries
· £525m for offshore wind projects over the next two years
· £435m support for energy efficiency schemes for homes, firms and public buildings
· £405m to encourage low-carbon energy and advanced green manufacturing

Which adds up to an apparently impressive £2.365 billion. However, even if the whole amount was to be spent, it would represent just 5% of the annual expenditure required for a ten year program to convert Britain to a low carbon/ low energy society. 5% will just not do it.
Here are two possible blueprints for such a conversion. Read it and judge for yourself:
Zero Carbon Britain: http://www.transitionnc.org/?q=node/50/419#comment-419
Green New Deal: http://www.transitionnc.org/?q=node/53/151#comment-151

Which brings me to the final point:

It must be completely clear to anyone by now that the Government will not solve the ‘energy’ problem for us. They were too busy saving the unsaveable financial system and now they have run out of money to do anything, let alone a task of such magnitude as re-engineering the country’s energy resources and infrastructure.

That means we are on our own.

If you ignore the problem, an approach favoured by at least 95% of the population, you will end up spending all the money you can earn on just keeping your family more or less fed and warm if you are lucky.

Alternatively, you can build yourself a lifeboat of skills useful in the energy poor future, lifeboat of a productive garden to grow much of your own vegetables, nuts, fruit, and protein, be it eggs or meat, and become as self sufficient in energy as you possibly can.

Better still, get your friends and neighbours to join you in building a resilient community, as independent of outside sources of energy and food as possible, a mutually supportive group spanning a village, Parish or a whole town. And that is known as Transition.

In short, what this Budget teaches us is not to rely on Government or other outside agencies to pull us through this mess – they will not be able to do so even if they knew what needs to be done. It teaches us to become self-reliant and resilient, preferably involving the whole community, in short – it teaches us to join in the Transition Movement.

It's a Budget for Transition.

Join us in this mammoth effort. Register on the website, become a member (through the Contact us page: http://www.transitionnc.org/?q=contact) read the News, take part in some of the Events, learn from the Resources section: http://www.transitionnc.org/?q=forum/46, buy or barter local produce, build up your community's food and energy resilience and tell us of your own plans so we can all learn from each other and benefit.

Good luck

ReeseR's picture

That's for sure!

It is noticeable that the economy is very much affected by the economic recession that hits our country. But most of us still need repay loans and don't have much left for basic family care.