Public sector cuts and redundancies are in danger of causing the second dreaded dip in this ongoing economic saga.

According to a Guardian report the British Retail Consortium say that expectations of public sector redundancies have damaged the property and retail markets. The BRC director general said 'Talk of public spending cuts is unsettling consumers and they are concentrating on essentials'.

The BRC say that big ticket items are no longer on peoples’ shopping lists. Things such as large flat screen TVs and shoes seem to have fared worst.

Not only that, according to a report in the Mail fears of a double dip recession increased on the news that estate agents have reported a fall in buyers as more houses come on the market leading to house price falls.

But why do we still think of this in a reverse fashion? The reason we don’t have the money to spend is because it’s already been spent, or possibly because we realise we don’t actually need the stuff. House price falls are a symptom, not a cause. Otherwise why doesn’t the government just order that all houses are to be worth twice tomorrow what they are worth today? Ludicrous thought.

The UK is not the only nation to be going through this. The Washington Post reports that the Pentagon is slashing jobs and streamlining processes too.

The mainstream thought is that the public sector did not cause the recession so should not suffer. But how did all those public sector workers afford their homes? Where did their jobs come from? Jobs that did not exist ten years or more ago.

The public sector and the private firms that support it (so are effectively public sector) make up a huge slice (about half according to some) of our economy. It has grown so large that cutting it is seen as endangering our economy. Doesn’t that prove that it has become too big? Now, just like so many other things, in the eyes of some the public sector has become too big to fail. And therefore it must be propped up in total at all costs.

But who will do the propping up? A failing and dwindling private sector burdened by the costs of the public sector?

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