USA – another great depression or greatly depressing?

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Will the American public realise what Mitt Romney’s fiscal plans mean, or will they elect him anyway?

Now that the Olympics are over and everybody’s having a rest from medal-counting (don’t forget the Paralympics will be starting soon, though, providing the opportunity to do it all over again), may I just take this opportunity to ask readers in the USA, just what the blazes is going on with your Presidential candidates?

A few years ago, your economy was devastated by comedy president George W Bush, with a policy known as ‘starving the beast’. For those with short memories, this involved tax breaks for the very rich, creating a deficit in the US Treasury, which made it possible for him to claim public services were costing too much – and then cut public services.

Bush left the White House in 2009 to pursue his career in stand-up comedy (and sank without a trace) but his ideas were taken up on my side of the Atlantic by one David Cameron and his bestie, George Osborne.

They realised that, after the credit crunch of 2008, there wasn’t enough money coming into the British Treasury to pay for public services and launched their policy of fiscal austerity on the UK’s already-depressed economy. The tax breaks for the very rich arrived a few years later.

Now, back in the States, you have a new Republican Presidential candidate, Mitt Romney, who – and please, correct me if I’m wrong – wants to starve the beast all over again.

Mr Romney wants to impose tax cuts for the very rich, but has no plan to offset the effect of these cuts by closing other tax loopholes or the like.

As one influential commentator has it: “Romney is just intending to blow up the deficit to lavish favours on the wealthy, then use it as an excuse to savage Social Security and Medicare.”

He claims there will be fabulous growth effects.

Well.

Seeing as Mr Romney’s policy seems so similar to Mr Osborne’s, lets look at what’s happened here in Blighty since fiscal austerity started biting, shall we?

It tanked.

From the moment Osborne’s first spending review (a mini-budget in late 2010) took effect, the economy flatlined. Since the beginning of 2012 it went back into recession in a big way, knocking a whole one per cent off GDP.

Meanwhile, the Coalition (Conservative and Liberal Democrat parties) has cut taxes for the very rich but also raised the amount people can earn without being taxed. This inevitably means less revenue for the Treasury. Services are already being cut and they’re discussing ways to cut further than previously planned.

Does anybody really think those poor people who’ve been lifted out of tax are going to be better off for the loss of the public services they need?

Do any US citizens reading this seriously think that lower and middle-class people in your country are going to benefit from the loss of public services that will be required to make your ultra-rich even richer?

And what’s the incumbent, President Obama, going to do? Are his budget plans any better?