Many of the challenges to the US economy articulated so eloquently by Barack Obama in his inauguration speech could equally be applied to the UK.
Homes have been lost, jobs shed and businesses shuttered on both sides of the Atlantic. The response has been similar too – combining recapitalisation of the banks and a fiscal stimulus to revive demand.
Obama’s vision is on a colossal scale, echoing Roosevelt’s New Deal of the 1930s. The US’s forty-fourth president is planning an $825bn stimulus to create or save more than 3 million jobs by the end of 2010.
Back at home, Prime Minister Gordon Brown has focused more on preventing the banks from collapse.
However, a second bail-out this week has done little to restore confidence, making full nationalisation of a number of banks more likely than not in the near future.
Brown has talked, of course, about creating a more modest 100,000 jobs ‘through public investments and public works’. But, as our cover feature shows, little detail has been provided beyond the PM’s suggestion that £10bn of funding will be brought forward.
We do not even know how many of the new jobs will be in the public sector or how many will be contracted out to the private sector. Equally, it is unclear if already planned projects will be included.
Meanwhile, unemployment is growing rapidly. Currently standing at 1.92 million, most observers expect it to reach 3 million by the end of the year. The focus so far has been on banking, property and retail, but public services are not far behind.
As our feature explains, councils across the country are culling jobs while the civil service faces a programme of continuing cuts.
Obama promised to act boldly to create new jobs. ‘We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together,’ he declared.
The prime minister must take the same approach, and swiftly, if the UK economy is to be saved from ravages unseen for many decades.
