Johann Hari: And so, Cameron's first victims are...

Step forward the unemployed, poor kids, children in care, the elderly, the disabled, and any feeble little steps we were making towards a low-carbon economy
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The Independent Online

So the yellowish liberal haze has now parted and we are Camer-on. The Prime Minister and George Osborne this week showed the first flick of their knife, marking out the areas they intend to cut much more deeply into over the next five years. Who have they decided can afford to take the pain first? Not rich people like them: they will continue to enjoy big state subsidies to build up their savings and maintain their estates. No. Step forward instead the unemployed, poor kids who are falling behind in their reading, children in care, the elderly, the disabled, and any feeble little steps we were making towards building a low-carbon economy.

Very few people in Britain would say our first move during a recession should be to shut down programmes that get the growing number of young people with no qualifications or training into their first job. Yet that is what the Conservatives have done. I've seen in my own part of east London how the Future Jobs scheme takes demotivated and lost kids and gets them into paid, on-the-job training for six months. It was too small, for sure – but now the programme has been abolished altogether, along with the £1,000 subsidy for employers who take on anyone who has been on benefits for more than six months. The Tories say they are not making cuts to "the front line" – but don't the long-term unemployed, stuck on £60 a week, live on the front line of British life?

The next set of cuts is well disguised. When you hear that the Communities Department has taken a 27 per cent cut, it sounds anodyne: what is it anyway? It's the money that goes to local authorities to pay for home help for the elderly and disabled, for monitoring children at risk, and children in care. Osborne has said he doesn't want councils to make up the difference by increasing council tax. So, very soon, there will be a big increase in the number of confused old people left unwashed and untended, and abused kids we never find in time.

Many of these cuts will end up costing us money in the long term. Over the past few years, children – mainly in poor areas – who have not been able to learn to read have been given special one-on-one tuition to get them up to a decent standard, rather than tumbling through their school years getting more confused and angry. Literate people are far less likely to commit crime and much more likely to pay taxes later in life. Cameron just closed the programme. The same child who loses her reading tutor now also won't get a small Child Trust Fund of £2,000 when she turns 18 – thanks to a Chancellor of the Exchequer who lives on an £4.2m trust fund of his own.

David Cameron's claims to care about global warming also just drowned. The subsidy to build wind turbines, the encouragement to buy electric cars – all gone. His massive cuts in the transport budget will make the trains and buses worse, pushing more people into their cars. They have even cut our low spending on flood defences – a bad idea on a stormy island as we go into a century where sea levels will rise.

Of course, the Cameroons say they have no choice but to do all this, because we are "bust". There is currently a £178bn-a-year gap between what the Government takes in, and what it spends. But there are two crucial questions here: when the Government should close this gap, and how it should close it.

It seems logical to pay off a debt as soon as possible. That's what you and I, as individuals, should do. But everything we have learnt about economics since the 1930s shows that behaviour that is rational for an individual will be disastrous for a government during a recession. At a time like this, consumers naturally spend less, causing demand to fall. This causes the economy to get worse still. This spiral can only be broken by the government borrowing and spending money to get the economy moving again. The reason why our Great Crash hasn't been followed by a Great Depression is because governments have done just that.

Now Cameron wants to stop the stimulus. That's what Franklin Roosevelt did in 1937 – and it triggered a collapse, requiring far more state spending in the end. FDR cursed his mistake. The economists who were most prescient about the dangers of the 1990s, including Nobel Laureates Professor Joseph Stiglitz and Professor Paul Krugman, say there is little risk of Britain going the way of Greece, since our national assets are vastly more valuable, but there is a big risk of a double-dip recession being Os-born from these policies.

Better a deficit than a depression. Better to pay interest tomorrow than the dole to millions more today. And when the time for closing the gap does come, there is a much better way to do it – by closing the income gap. The first people to pay should be those who can afford it: the wealthy. For example, the 1,000 richest people in Britain have added £77bn to their wealth in the past year alone. Can't they afford to make sacrifices a little more easily than a 17-year-old on the dole?

It looked at first like the Liberal Democrats had managed to inject a serious piece of progress into the Tory programme by insisting on an increase in Capital Gains Tax back to 40 per cent. This would hurt only wealthy people with shares and second homes. But there are signs that Osborne is now backing off from this pledge after a rebellion from the Tory backbenches, who – hilariously – say it hits "the middle class". The median income in Britain is £23k a year: how many of them own second homes? This policy is a key test of whether the Lib Dems really can tame the Tory right.

One obvious next step would be to restore the top rate of income tax to the level it was for the first decade of that notorious red, Margaret Thatcher: 60 per cent. The right says people will leave in droves and the Exchequer will end up with less. But they said that when the last government increased the top rate to 50 per cent – and it turned out that the number of rich people leaving actually fell by 7 per cent.

There are many other creative ways to raise extra funds. In California, they are about to hold a referendum on legalising and taxing cannabis – a move that would bring in $1.4bn in revenue, and save over $20bn in pointless police prosecutions and imprisonments. Governor Arnold Schwarzenegger is a fan: will former cannabis smokers Cameron and Clegg do the same?

And cuts? The entire bill for the current wave could have been covered simply by ending the war in Afghanistan, which more than 60 per cent of British people say is "unwinnable". Over the long term, we will have to pare back more of our massive military spending, which more often simply stirs hatred against us than it does any good.

And there is a smorgasboard of subsidies for the super-rich waiting to be dismantled. To pluck one random example – why do we give the Duke of Westminster, who is worth £5bn, an estimated £326,000 a year to "maintain" his land?

But Cameron has not chosen any of this. He has chosen instead to start his slashing early, and to target it the weakest and the greenest. Prime Minister, the 1980s are calling – and they want their dogma back.;