For months, prominent Republicans have insisted that the United States follow Britain’s lead and immediately embrace sweeping austerity measures. The GOP doesn’t care for all of British Prime Minister David Cameron’s ideas — conservatives in the UK accept tax hikes as a way to close budget shortfalls — but accept the basic proposition that austerity helps.
And how’s that working out for our friends across the pond?
A slowdown in Britain’s growth in the second quarter means that the economy is weaker than thought and has no chance of meeting its official growth target this year.
The eagerly awaited preliminary GDP estimate for April to June showed the economy growing by 0.2%, rather than contracting. Although this was better than some of the gloomier forecasts, it is still slower than the 0.5% growth seen in the first quarter, which came after a 0.5% decline in the fourth quarter of last year.
Austerity doesn’t help a struggling economy; it makes matters worse. Richard Portes, an economist at the London Business School recently said Cameron’s failures should be “a cautionary tale” to others thinking about following his lead.
He didn’t mention conservatives in United States, but he might as well have.
The Cameron government believes the path to prosperity runs though fewer public services, less public investment, and counting on low interest rates to save the day. This experiment isn’t working at all, and yet, there’s been no shortage of congressional Republicans who’ve argued, “We need a budget with a bold vision — like [the one] unveiled in Britain.”
Why emulate failure?
David Dayen added this week, “What’s amazing about this debt limit debate, and the headlong rush to austerity, is that we have empirical evidence of what can result, in this kind of economy, when you massively roll back spending. We even know what happens when you do that amid the threat of a debt downgrade rather than the fundamentals of the financial markets. All you have to do is look to Britain, which has never been the same since their austerity package was unveiled by the Tories.”