N.Y. Times editorial: Britain continues with failed economic policies

An editorial in the recent Sunday Review of the New York Times criticizes the UK Cameron government's plans to slash deficits and promote economic growth. The editorial claims that Cameron's policies failed when he began them a year and a half ago. Now he is continuing on with the same failed policies.

Cameron attempted to stimulate growth through radical austerity programs. Recent figures show that British growth is flat while unemployment is still going up and not down. The ratio of debt to GDP is climbing faster than the government had predicted. The governing Liberal-Conservative coalition solution to the problem is more of the same.

The austerity policies have reduced consumer demand slowing growth. Since the economy is not growing revenues to pay off the deficit have fallen so that the government has now been forced to change it deficit targets into the future.

The government now plans on further cuts to spending and will extend the austerity measures until 2017. This will mean more years of underfunded public services and lagging growth.

Projections are for output to actually shrink slightly by 0.1 per cent this quarter and grow only by the same amount in the first quarter next year.

The UK has 2.6 million unemployed the highest in 17 years. Unemployment is particularly severe among the young.

The editorial recommends the same type of strategy as economists such as Paul Krugman. In the short-term more money should be spent and not less to increase production. This should be combined with long-term debt reduction policies.

In my opinion the editorial misses the point of the austerity exercises. These policies are not just meant to be debt reduction policies, they are meant to force cuts to the social safety net and public services. More money will be available for profit. The working class is being put in its place and told that decent pensions and other benefits that have helped wed workers to the system are no longer sustainable. The policies the editorial discusses are not just British policies they can be found in Greece formerly under a Socialist government and in many countries regardless of whether governments are nominally left or right. For more see this article.

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