No to Austerity!

[Supertramp]

Austerity is an ideologically motivated means to shift wealth from the poor to the rich, as characterised by conservative party policy since 2010. This cynical and exploitative form of policy was comprehensively rejected by Iceland. The Icelandic government chose instead to respond to the financial scandal of 2008 by letting their criminal banks fail, putting their corrupt bankers in prison, and protecting their public sector and their low and middle income citizens.

 

As I said in my OP, we have much to celebrate and ,as yesterday's Queen's Speech demonstrates, Theresa May's abusive and cynical manifesto is dead.

 

Hi,

 

Austerity is a reduction in government spending.

 

They cut it massively. Public sector = government spending.

 

I hope that helps.

 

The end.

[Staunton]

Iceland chose to protect its public services, to ensure that the economic crisis caused by the financial scandal was ameliorated by policies that protected poor and middle income earners.

 

In contrast the conservative led coalition moved instead to use a programme of ideologically motivated austerity, placing the costs of the financial crime firmly on the shoulders of the poorest and most vulnerable people in the UK, those entirely innocent of the scandal. The tories (relying on and receiving significant assistance from the mainstream media) chose to demonise the disabled and the unemployed, to mount an assault on the basic services that ordinary citizens depend on for their needs - schools, the NHS, and social care, and to gut the agencies of oversight - the Care Quality Commission, the Ombudsman facilities, Revenue and Customs. The disgusting legacy of this cynical abuse of state power is that our public institutions are in crisis, our teachers, nurses, social workers and police exhausted and demoralised, and our services systematically depleted of essential resources.

 

But this project has followed Theresa May into the long grass. Her cynical manifesto is in tatters. And that is something that we should be celebrating - it offers hope for all, not just the few.

[Supertramp]

Iceland chose to protect its public services, to ensure that the economic crisis caused by the financial scandal was ameliorated by policies that protected poor and middle income earners.

 

In contrast the conservative led coalition moved instead to use a programme of ideologically motivated austerity, placing the costs of the financial crime firmly on the shoulders of the poorest and most vulnerable people in the UK, those entirely innocent of the scandal. The tories (relying on and receiving significant assistance from the mainstream media) chose to demonise the disabled and the unemployed, to mount an assault on the basic services that ordinary citizens depend on for their needs - schools, the NHS, and social care, and to gut the agencies of oversight - the Care Quality Commission, the Ombudsman facilities, Revenue and Customs. The disgusting legacy of this cynical abuse of state power is that our public institutions are in crisis, our teachers, nurses, social workers and police exhausted and demoralised, and our services systematically depleted of essential resources.

 

But this project has followed Theresa May into the long grass. Her cynical manifesto is in tatters. And that is something that we should be celebrating - it offers hope for all, not just the few.

 

Hi there.

 

You don't seem to know what austerity means. Instead of regurgitating articles maybe try to understand what actually happened in Iceland.

[Yorkshire 53]

The Bank of England was supposedly nationalised after the war, but, in effect, only the building was nationalised with the private banks still left running the show. In addition there is the little known 'BoE Nominees' Act' which allows the super rich to hold highly secretive accounts there, including the Royals.

[Staunton]

Iceland's experience during the 2008 financial scandal is a truly inspiring story.

 

Following the 1995 election in Iceland, a centre-right coalition was formed, and immediately liberalised the economy. Iceland's biggest banks were hastily privatised, and reckless excesses soon followed. And taxes were reduced as Iceland's traditionally high, Scandinavian style revenue system was reformed.

 

Personal borrowing soared as individuals were encouraged to join the consumer revolution that was already well established in the US and UK. The banks used dubious leveraging to buy up assets valued at many times Iceland's GNP, and the US ratings agencies gave the big Icelandic banks triple-A status.

 

Then, in October 2008, Iceland suffered a banking catastrophe in the aftermath of the disintegration of the US stock market. The country's commercial banks defaulted, Iceland's currency, the króna, collapsed, and the economy was left in ruins. Inflation soared, unemployment tripled, and thousands lost their savings.

 

Protesters immediately hit the streets, demanding that the government resign, calling for an immediate election, insisting that the chief of the Central Bank stand down, and agitating for swift economic reform. The government ignored these demands, but the protests simply intensified. Led by activist Hördur Torfason, people began the now famous 'Pots & Pans Revolution', bringing their kitchen utensils out to the plaza in front of the parliament building. The noise prevented any government business, and soon the cabinet had resigned, to be replaced by a caretaker government consisting of an alliance between the Social Democratic Alliance and the Left Green Movement.

 

Iceland's parliament, the Allting, was the first parliamentary democracy on earth, and heading the new coalition was Jóhanna Sigurdardóttir, the first openly gay premier in the world. Sigurdardóttir immediately sacked the executive staff of the Central Bank and the entire board of the Financial Regulation Department.

 

And the banks were allowed to fail! Instead of bailing out the banks, the coalition bailed out their savers, and debt relief was made available to citizens and small businesses. Emergency legislation was passed by parliament in October 2008 to minimise the impact of the crisis. New financial regulations were enacted, capital controls were imposed, and the króna was devalued.

 

But the financial scandal had hit Iceland hard, and support was sought from the International Monetary Fund. The IMF is a fundamentally neoliberal institution, and austerity is its stock answer to every economic woe. However, Iceland rejected their doctrine. Dismissing the IMF's demand that Iceland shrink its welfare services, Sigurdardóttir's coalition maintained spending on healthcare and education, and secured unilateral aid from other nation states. Eventually the IMF backed down on the severity of their austerity demands and a package was approved that protected Iceland's strong welfare state. Tax increases were targeted on higher income groups, those best placed to accommodate the measure, while unemployment benefits were increased. So were old-age and disability pensions and the minimum wage, effectively constituting a progressive redistribution of wealth simultaneously with bringing the state into recovery. And, since poor people tend to spend, this had a positive effect on the domestic economy.

 

People were able to stay in their homes, unemployment soon began to fall, and the economic situation slowly but surely began to recover. Iceland still owes a substantial amount, equivalent to almost 100% of it's GDP. However, the tiny nation, with a population smaller than that of Sheffield, has seen its economy improve dramatically.

 

Iceland's remarkable recovery has proved an inspiration to many commentators and has been cited as a significant rebuke to those who continue to promote traditional austerity measures.

[Cyclone]

They DID implement austerity though. And if you're going to copy and paste you should really attribute it to a source.

[onewheeldave]

They DID implement austerity though. And if you're going to copy and paste you should really attribute it to a source.

 

Sounds like a very different type of 'austerity' to the one being inflicted on us though

 

 

And the banks were allowed to fail! Instead of bailing out the banks, the coalition bailed out their savers, and debt relief was made available to citizens and small businesses. Emergency legislation was passed by parliament in October 2008 to minimise the impact of the crisis. New financial regulations were enacted, capital controls were imposed, and the króna was devalued.

.......Dismissing the IMF's demand that Iceland shrink its welfare services, Sigurdardóttir's coalition maintained spending on healthcare and education, and secured unilateral aid from other nation states. Eventually the IMF backed down on the severity of their austerity demands and a package was approved that protected Iceland's strong welfare state. Tax increases were targeted on higher income groups, those best placed to accommodate the measure, while unemployment benefits were increased. So were old-age and disability pensions and the minimum wage, effectively constituting a progressive redistribution of wealth simultaneously with bringing the state into recovery. And, since poor people tend to spend, this had a positive effect on the domestic economy.

.

[Supertramp]

Sounds like a very different type of 'austerity' to the one being inflicted on us though

 

Staunton's post is not true though.

Iceland cut spendng on education and on Health.

Tories haven't cut spending on the NHS at all, in fact it's gone up every year)

So has funding on schools

 

To help the low paid they have massively increased the tax free allowance.

 

I am growing to hate all politicians and also people who pick a side and then stick to it even though the facts are different. It's just bizarre, its not a sport.

[Hairyloon]

Tories haven't cut spending on the NHS at all, in fact it's gone up every year)...

 

But has it gone up in real terms? Or has it gone down in relation to the increased PFI payments?

[onewheeldave]

Here's a wiki page on the 2009 Icelandic financial crisis protests

 

https://en.wikipedia.org/wiki/2009_Icelandic_financial_crisis_protests

 

It sounds like the population rebelled (successfully), got rid of the old parliament, and, managed to go to extraordinary lengths to replace it with a government that was actually representative of the population.