Thank you.
They are trying Paul Ryan economics on for size. Much smaller government with the intention of generating compensating growth.
It has been tried. We know it creates immediate hardship in the short run and deficits in the long run. Also, where the ideological experiment has been tried (eg in Kansas) it didn't produce the long run growth that was claimed, because it generated demand side issues too. So there is evidence that it doesn't work as advertised.
On top of which, no one voted for it. So there's no mandate.
It's a strong probability that the Conservatives get voted out for adopting US right wing ideological brutallism over traditional, admittedly somewhat mushy, British conservatism. And then we'll swing too far in the other direction, where the only thing that matters is claiming to be a victim.
Markets may come to think that savage cuts for the most vulnerable is an economically advantageous idea for investors in the long run. Personally, I'm also interested in immediate social costs, which investors/markets securely ignore.
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