One of the most powerful sustaining characteristics that make us unique among the animal kingdom is hope. It is what sustains us in times of hardship, tragedy and despair. Austerity mania, for the 99%ers, that is currently sweeping Europe, is getting close to killing hope.
The evidence that austerity measures are not working is all around us, however politicians insist that the good times are not far away and we should hold our nerve and persevere; there is no alternative, they say.
Research conducted by the Institute for Employment Research and the Institute for Fiscal Studies, commissioned by the Resolution Foundation, paints a frightening picture of the economic well-being of those on the bottom half of income distribution in the UK up to the year 2020 (benefit reliant and those in the lower to middle income, LMI, groups). This is what researchers predict:
"Living standards for working-age households in 2020 are likely to be substantially lower for those in the bottom half of income distribution (the benefit-reliant and LMI groups) than they were for households in the same position a decade earlier. Over the 2008 to 2020 period as a whole, the modelling suggests a decline in real terms income of around 5 percent for low to middle income households and around 19 percent for households reliant on benefits. Only higher income households--those above middle income--see income growth, of around two per cent over the period."
What are the economic assumptions made in the research? Here they are:
"All the projections [above] in this report rest on GDP forecasts of modest growth to 2015 and of annual average growth of 2.5 per cent from 2015-2020 which, by comparison to more recent forecasts, now look optimistic. The forecasts also assume no additional changes to public spending beyond those announced by the Chancellor's 2011 Autumn Statement (and so don't include, for example, further cuts to welfare spending)."
The above predictions imply that income inequality will increase further; the researchers predict an increase in inequality of 18% between the richest and poorest households.
Joseph Stiglitz, the Nobel laureate economist, puts the economic argument against the concentration of wealth and power in the hands of the 1%ers thus: