Chapter

From financial crisis to fiscal crisis

Ian Gough

in Social Policy in Challenging Times

Published by Policy Press

Published in print September 2011 | ISBN: 9781847428288
Published online May 2012 | e-ISBN: 9781447305521 | DOI: http://dx.doi.org/10.1332/policypress/9781847428288.003.0003
From financial crisis to fiscal crisis

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This chapter explores the transformation of the 2008 financial crisis into a fiscal crisis and a welfare crisis. It provides an endogenous theoretical explanation of the crisis in terms of the collapse of neo-liberal inequality and debt-fuelled growth. The chapter then analyses the progress of this crisis in the UK — a major global player due to the City of London — in two stages: the impacts of financial bailouts, Keynesian measures and sharp recession on public finances; and the subsequent reactions as governments switched to fiscal tightening and welfare cuts. It concludes by sketching out an alternative framework for a sustainable and just economic and welfare system.

Keywords: financial crisis; financialised capitalism; City of London; fiscal crisis; political economy; system contradiction; welfare cuts

Chapter.  5481 words.  Illustrated.

Subjects: Economic Sociology

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