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Cameron’s Remarkable Achievement



April 25, 2012 – Comments (5)

I don't often agree with Krugman, but he is right on with this one.


Paul Krugman - New York Times Blog
April 25, 2012, 10:07 am
Cameron’s Remarkable Achievement

From Britain’s Office of National Statistics (pdf):

When David Cameron became PM, and announced his austerity plans — buying completely into both the confidence fairy and the invisible bond vigilantes — many were the hosannas, from both sides of the Atlantic. Pundits here urged Obama to “do a Cameron”; Cameron and Osborne were the toast of Very Serious People everywhere.

Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s.

Britain is also unique in having chosen the Big Wrong freely, facing neither pressure from bond markets nor conditions imposed by Berlin and Frankfurt.

Now, the defense I hear from Cameron apologists is that the austerity mostly hasn’t even hit yet. But that’s really not much of a defense. Remember, the austerity was supposed to work by inspiring confidence; where’s the confidence? Basically, the expansionary aspect should already have kicked in; it’s all contraction from here.

Needless to say, Cameron and Osborne insist that they will not change course, which means that Britain will continue on a death spiral of self-defeating austerity.

5 Comments – Post Your Own

#1) On April 25, 2012 at 1:21 PM, leohaas (30.12) wrote:

Oh, c'mon, austerity is supposed to throw the country into a depression. It is what is designed to do. What counts is how the country gets out of that depression.

Yeah, right...

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#2) On April 25, 2012 at 2:07 PM, binve (< 20) wrote:


As Warren Mosler often says regarding austerity: "No matter how much I cut off, it keeps getting shorter".

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#3) On April 25, 2012 at 5:12 PM, Frankydontfailme (29.36) wrote:

It's amazing what passes as austerity these days!


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#4) On April 25, 2012 at 5:36 PM, DJDynamicNC (42.39) wrote:

Cut expenditures in the middle of a recession, throw people out of work and on the dole in the name of "shrinking government," and let the economy wilt without adequate countercyclical support, then act surprised that deficits continue to increase and call for... more cuts, more shrinking government, more wilting.


 Of course this patient isn't recovering, doc. You need to apply more leeches.

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#5) On April 25, 2012 at 6:12 PM, wolfman225 (46.82) wrote:

I think the UK already has enough leeches.  That's a part of the problem.

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