Austerity tried in UK. Now, few support it.
http://www.newstatesman.com/blogs/politics/2012/08/exclusive-osbornes-supporters-turn-him
"On 14 February 2010, 20 prominent economists wrote to the Sunday Times in support of George Osborne's deficit reduction strategy. They said: "... in order to be credible, the government's goal should be to eliminate the structural current budget deficit over the course of a Parliament, and there is a compelling case, all else equal, for the first measures beginning to take effect in the 2010/11 fiscal year." The Chancellor hailed their letter as a "really significant moment in the economic debate".
Two and a half years later, the UK is mired in a double-dip recession and Osborne is set to borrow £11.8bn more than Labour planned. For this week's issue of the New Statesman (out tomorrow), we asked the 20 whether they regretted signing the letter and what they would do to stimulate growth. Of those who replied, only one, Albert Marcet of Barcelona Graduate School of Economics, was willing to repeat his endorsement of Osborne. Nine urged the Chancellor to abandon his opposition to fiscal stimulus and to promote growth through tax cuts and higher infrastructure spending, while others merely said "no comment" or were "on holiday".
With the UK able to borrow at the lowest interest rates for 300 years (largely owing to its non-membership of the euro and its independent monetary policy), the signatories are both surprised and dismayed at Osborne’s failure to invest for growth. Since he entered the Treasury, the Chancellor has cut investment spending by £24.4bn, a net reduction of 48 per cent."
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