The peace dividend, and other cuts

Back at the end of the Cold War, we were told that one of the big benefits of negotiating a settlement of sorts with the Warsaw Pact would be the "peace dividend" - the money we wouldn't be spending on defence, which could then be ploughed back into tax cuts, or making ploughshares, or whatever. Even in my youth, this struck me as being something of a mixed blessing. £1 million spent on buying a tank, for example, doesn't simply procure a lump of metal. It pays for the salary of the people who are involved in putting it together - which in turn, pays for the salary of the people in the supermarket near the tank factory ... and so on. £1 million cut from the forces budget represents 10 fewer people employed. So the peace dividend is really a cut in spending, which ultimately means (in simple terms) people at some level "lower down" have to find alternative work.

In fact, even with the thawing of the Cold War, the security situation didn't vastly improve (or was it that certain interests couldn't allow the overall security situation to improve? Is that too conspiratorial?). Wildcard governments, international terrorism and religious fundamentalism simply ended up with a greater influence on policy. Money was redirected rather than cut.

With the astringency that we are seeing following the ballooning of public spending over the last few years in the UK, a similar process has to take place. The government talks about spending cuts - but the money that is being spent is largely, ultimately, being spent on people's salaries. So the government says that it is going to do away with ARQ (a random quango) and save £50 million per year - and 200 people have to find new jobs. And the people who depended upon their money - the shops, services, piano teachers, vets, decorators - also risk losing part of their income.

That's the problem with cuts. Everybody wants to see the government spending less taxpayer's money - but when an economy has ended up leaning more and more upon government spending, it hurts everybody to be weaned off it. Too many people don't see the link between "government spending" and themselves. "I think the government should spend more on schools/health/defence/police", the vox pops say - but when asked if they would be prepared to pay more tax to fund it, the answer suddenly changes. Similarly, lots of people assume that government spending cuts are a good thing - until the impact becomes apparent upon people to whom they are close.