The US v. the UK on Austerity
Paul Krugman notes the following:
[Chancellor of the Exchequer, Greg] Osborne’s big idea was that Britain should turn to fiscal austerity now now now, even though the economy remained deeply depressed; it would all work out, he insisted, because the confidence fairy would come to the rescue. Never mind those whining Keynesians who said that premature austerity would send Britain into a double-dip recession.
Strange to say, Britain’s recovery stalled soon after Cameron/Osborne began their new policies, and the country is now in a double-dip recession.
This is the kind of thing that ought to, at least, gives us pause for thought on the question of the appropriate fiscal policies going forward. It is, after all, an actual comparative set of empirical observations as opposed to wishful thinking about how policy might actually work.