With a new government the United Kingdom has moved quickly to cut their budget deficit. £6 billion in spending cuts is expected to be announced next week to cut into their £163 billion deficit, which is 12.6% of GDP. The cuts are modest, bringing the deficit down by only 0.5% of GDP. However, it is expected that more cuts will be coming in the future.

They will be needed because Britain’s debt-to-GDP ratio will hit 90% next year about the same as for the United States. So when is the U.S. going to cut its budget deficit? Not any time soon with the current congress.

What can be done? No much, except to remind Congress, via the voting booth, who is really in charge.

See you in November.