Austerity FAIL (UK edition)
Remember how austerity was supposed to make everything right in the UK? Well, it’s not turning out that way, as the country’s economy contracts at a faster rate (0.7% in the 2nd quarter compared to estimates of 0.2%) than expected:
Economists are blaming much of the decline to heavy rainfall and an extra bank holiday
I suppose holding that belief is their right, but I’m blaming austerity, and so do most people (notable exception: people like James Pethoukokis at the AEI, who are misguided in the same way that UK PM David Cameron is). As Joe Weisenthal of Business Insider describes about why the UK is not in the same situation as European countries:
The Euro is badly flawed, and that’s created all kinds of sovereign debt problems not befitting developed economies. That’s turned its banking system into shambles, further exacerbating the problem.
The U.K. doesn’t have this problem.
It controls its currency, and the market is not at all worried about its debt position.
And yet! And yet David Cameron has — for no reason — pushed the same austere ideas that are leading to ruin in Greece and Spain.