18/08/2011 08:22 BST | Updated 16/10/2011 06:12 BST

Funeral Fires for the Britist Social Welfare State

The media still seems baffled that prim and proper England would be almost brought to its knees by what the London Daily Mail newspaper referred to as "nihilistic and feral teenagers" rioters. For four days anarchistic youths "from all walks of life raced around the streets mindlessly and desperately hurling bricks, stones and bottles at the cops while looting here and setting bonfires there, leading the authorities on a merry chase of catch-as-catch-can as they tweeted their way from one strategic target to another." The British Social Welfare State that Margaret Thatcher and her Conservative Party dismantled thirty years ago has come roaring back with 14 year of Labor Party rule. Today's British youth have been indoctrinated in school that Thatcher was an anti-democratic fascist, who denied the public their entitlements. It should not be surprising that this generation of "Mini-Me" leftists would act out now that Parliamentary control a broke U.K. has gone to the Conservative Party under David Cameron to return the nation to solvency.

It has been 21 years since Thatcher retired as British Prime Minister. During her 11 year reign as the "Iron Lady" she systematically reversed England's precipitous economic and military decline. When the she became Prime Minister in 1979 the U.K. was in a severe recession. Violent riots broke out in the South London neighborhood of Brixton over demands for more social spending. Scores of buildings were burned and 2500 policemen were injured and as the violence raged. The rioting spread to Liverpool where over a four day period 150 buildings burned and 781 more police officers were injured. Police were finally forced to use CS gas for the first time on the British mainland to quell the unrest.

The Iron Lady's tough response to the rioters was applauded by the public and gave her the mandate to carry out her agenda of fiscal conservatism. She implemented economic policies that led to the sale or closure of state-owned companies, deregulation of British industry and the financial sectors, flexibility in labor markets, and withdrawal of state subsidies. After a rough start, British GDP rose twice as fast as government spending for the first time since the 1920s. Thatcher demanded balanced budgets and refused to be suckered into adopting the euro currency. When Thatcher retired in 1990, the U.K. was considered a growth engine of Europe.

The Labor Party under Tony Blair took back control of Parliament in 1997. Blair described his "New Labor" party in 2001: "We are a left of center party, pursuing economic prosperity and social justice as partners and not as opposites". Regardless this rhetoric; Blair stayed true to Clause IV of the Labor Party's constitution that defines the party as "Democratic Socialist" by appointing Gordon Brown as Chancellor of the Exchequer.

Over the next 10 years, Brown succeeded in making the Bank of England independent and creating international agreements on Climate Change, Cap & Trade, and elimination of poverty. Brown increased the social program funding using a new inflation measure to hype the Consumer Price Index. Brown sought every opportunity to expand government, take greater control of education, and raise taxes. According to the OECD, UK taxation increased from a 39.3% share of gross domestic product in 1997 to 42.4% in 2006; a higher level than even Germany. Between 1999 and 2002 Brown sold 60% of the UK's gold reserves, approximately 395 tons, at $275 an ounce. Shortly before gold entered its current bull market that has taken the metal to over $1750 an ounce.

Brown became Prime Minister in 2007 and stayed true to his "Democratic Socialist" credentials by expanding deficit spending with a scheme he called "The manifesto for change". He even attempted to introduce a "better constitution" that is "clear about the rights and responsibilities of being a citizen in Britain today". Brown raised union wages by 26% for the National Health System and squandered money building new eco-towns for 100,000 subsidized homeowners.

When the global recession hit in 2008; Brown attempted to stimulate demand through a myriad of schemes; including a bank rescue package worth $850 billion and cut the Value Added Tax (Sales Tax) by 2.5%. The U.K. ran deficits of as much as 14% of GDP, until Standard and Poors threatened to downgrade Britain's credit rating and spending was forced to be slashed.

By the time the Conservative party took control under Prime Minister David Cameron in 2010, the U.K. government was so broke that the National Health Service had a 12 month delay for hip replacements, cataract surgery, tonsil removal, varicose vein treatments, children's hearing aids, and the list goes on.

In the aftermath of the recent violence, British public opinion has swung resoundingly in favor of the Conservatives push for fiscal sanity. The riots that happened in England will probably be repeated in Europe, Asia and the U.S. as social welfare programs collapse under their massive debts. To most young people around the world; Margaret Thatcher and Ronald Reagan were portrayed by their school teachers and college professors as reactionary dinosaurs of some horrible age. Don't expect these youth to cheer for the transition back to fiscal responsibility.

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