Friday, October 22, 2010

Dr Krugman looks at the British austerity fad

And the prognosis is that Britain has managed, once again in its proud history, to fuck itself. Then again that is about all you can do when you try to balance your budget as you are in the midst of a depression.
Both the new British budget announced on Wednesday and the rhetoric that accompanied the announcement might have come straight from the desk of Andrew Mellon, the Treasury secretary who told President Herbert Hoover to fight the Depression by liquidating the farmers, liquidating the workers, and driving down wages. Or if you prefer more British precedents, it echoes the Snowden budget of 1931, which tried to restore confidence but ended up deepening the economic crisis.

The British government’s plan is bold, say the pundits — and so it is. But it boldly goes in exactly the wrong direction. It would cut government employment by 490,000 workers — the equivalent of almost three million layoffs in the United States — at a time when the private sector is in no position to provide alternative employment. It would slash spending at a time when private demand isn’t at all ready to take up the slack.
Once again, politics is more about the ideology than doing what works. Fortunately this is happening in Britain, a nation of dull witted twits of no use to anyone.

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