We know that mistaken economic ideas don’t tie just because there is massive evidence against them. But the fact that austerity is not working in the very heartland of what some call “the neoliberal project” should create some discomfort, to say the least. Here’s some interesting info about British austerity from the reliably sharp Martin Wolf: not only did austerity depress growth like nuts, bit it also increased debt.
“In an article entitled “Self-defeating austerity?” published in the October National Institute Economic Review, Dawn Holland and Jonathan Portes argue that UK GDP could well be 4.3 per cent lower this year and 5 per cent lower in 2013 than it would have been without these consolidation programmes, including the UK’s. Moreover, in 2013 the UK’s ratio of public sector debt to GDP might be 5 percentage points higher than it would have been without the co-ordinated contraction.”