Thursday, December 6, 2012

The British Experiment in Using Austerity as a Way to Prosperity Has Failed

But Conservative Chancellor George Osborne Will Not Pronounce the Corpse Dead

As has been noted here before, the British economic policy of focusing solely on bringing down the deficit as a means of stimulating economic growth and returning that country to prosperity is probably the closest thing anyone will have to a controlled experiment in economic policy.  And it turns out the results of the experiment are exactly what non-biased economists said they would be.  The experiment is a colossal failure.

Why is This British Finance Minister Smiling?
Because he is rich and has a job even if
you don't.

The tweaks to individual budgets came in the context of a worsening outlook for the UK as a whole.

The OBR now expects the economy to shrink 0.1 per cent this year and grow 1.2 per cent next year, down from its 0.8 per cent and 2 per cent growth forecast in March. It also downgraded its outlook for the following three years.

Mr Osborne said Britain would miss by a year its target to have debt falling by 2015-16 as a percentage of national income. He also said he would need to extend austerity by another year to 2018 to close the budget deficit.

So why not admit the policy is not working and change course?  Well that would require renouncing Conservative doctrine and faith based economics.  For Conservatives in Britain it is better that millions suffer, that the economy decline and that difficult times continue  rather than even acknowledge that their beliefs can be questioned.

After all, the current economic malaise in Britain does not affect the well off people, that is, the Conservatives who support and control British government.  So what’s the problem?  Oh, the problem is that it will take at least 8 years for British policy to have worked, and it took only 6 years for Britain and its allies to defeat the Nazis. 

Oh, that.

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