Correspondent Mark Phillips warned of the fiscally conservative approach: "It's a high-stakes roll of the economic dice involving massive spending cuts and huge job losses." He rolled a pair of dice onto a Monopoly board as he made that declaration. After detailing some of the planned cuts, Phillips explained: "The projected government job losses – 490,000, about one in ten government workers."
Phillips then fretted: "The British government is gambling that as the economy improves, private business will grow to make up for the government job losses. But critics say it's a risky bet and that the cuts could force a second recessionary dip and that the British pound may start to look like this." At that point, Phillips held up Monopoly money. He skeptically concluded: "Britain has now become a test case as to whether cutting a country's deficit fixes its economy or makes it worse."
Here is a full transcript of the report:
6:34PM ET
KATIE COURIC: It was the mortgage meltdown that touched off the worldwide economic crisis and many countries are still struggling to recover. Today Britain's new conservative government outlined the sharpest cuts in public spending in six decades, the equivalent of $135 billion over the next five years. Experts on both sides of the Atlantic will be watching carefully to see if that kind of severe belt tightening can cure an ailing economy. From London, here's Mark Phillips.
MARK PHILLIPS: It's a high-stakes roll of the economic dice involving massive spending cuts and huge job losses.
[ROLLING DICE ON MONOPOLY BOARD]
Necessary cuts, the government says.
GEORGE OSBORNE [BRITISH FINANCE MINISTER]: And we've taken our country back from the brink of bankruptcy.
PHILLIPS: A brink approach because of Britain's huge public deficit. More than 12 percent of its total economy, compared to a U.S. deficit of about 9 ½ percent. The cuts – Britain's Home Office, which oversees police and prisons, will see its budget slashed 24 percent. Education, down 3 percent. Transport, down 15 percent. Defense, down 8 percent. A cut so serious, 42,000 soldiers and civilians, that Prime Minister David Cameron called President Obama to assure him Britain could continue its war effort in Afghanistan. The projected government job losses – 490,000, about one in ten government workers.
The British government is gambling that as the economy improves, private business will grow to make up for the government job losses. But critics say it's a risky bet and that the cuts could force a second recessionary dip and that the British pound may start to look like this.
[HOLDS UP MONOPOLY MONEY]
ALAN JOHNSON [BRITISH SHADOW FINANCE MINISTER]: The deepest cuts to public spending in the – in living memory.
PHILLIPS: Britain has now become a test case as to whether cutting a country's deficit fixes its economy or makes it worse. Mark Phillips, CBS News, London.
