The unspoken assumption by union and Labour Party leaders, that the Tory/ Lib-Dem cuts are inevitable and can only be alleviated by negotiating voluntary redundancies and used as grist for electoral agitation, is being proved reckless.
Evidence is mounting that the cuts will bring not only their obvious immediate damage, but also some degree or another of "double-dip" downturn in the whole economy.
The crisis of September 2008 came from overaccumulation of debt. An intricate network in which one capitalist borrowed from another, who borrowed from yet another, and then yet another, with households and industrial or commercial capital as the first borrowers in the chain, eventually toppled, as doubt about whether debts could or would be repaid flooded through the system.
Governments limited the collapse by taking over or guaranteeing key debts of the major banks. Governments command greater confidence as repayers of debt, but not unlimited confidence. Thus, now, the crisis of the debts of Greece and Ireland, and soon of Portugal, Spain, and Italy.
To pay down the debts, even governments need expanded income. That is unavailable without an expansion of industrial and commercial investment and of household consumption.
The theory of the Tory/ Lib-Dem cuts is that by limiting the expansion of government debt they will limit interest rates and the "crowding-out" of industrial and commercial borrowing by government borrowing, and thus clear the way for private capital to expand.
Even on the most mainstream of economic assumptions, this argument depends on those desired effects outweighing the depressive influence of reduced market demand from workers who have lost their jobs and capitalists who have lost their public-sector contracts.
The statistics of the decline of output in October-December 2010 suggest that the depressive influences are weightier. And that is before any economic shocks.
Such shocks are likely. Portugal, Spain, Italy, Ireland, and Greece will probably not get through the next year or so without further crises caused by doubt about their ability to cover debt. Across the rich capitalist world, the unsustainable household debt levels of 2007-8 still prevail, and are unlikely to improve soon.
Not to fight to stop the cuts now is recklessly to accept the probable devastation of a whole generation by prolonged economic depression.