Alex Massie Alex Massie

I Think Paul Krugman is Mistaken – Spectator Blogs

The great sage – once described to me by someone who attended a (highly) derivative speech he made on the Scottish economy as Woody Allen with statistics and no jokes – blogs that George Osborne is “Britain’s Paul Ryan”. Remarkably, this seems unfair on both Mr Osborne and Mr Ryan.

Anyway, Krugman writes:

Osborne’s big idea was that Britain should turn to fiscal austerity now now now, even though the economy remained deeply depressed; it would all work out, he insisted, because the confidence fairy would come to the rescue. Never mind those whining Keynesians who said that premature austerity would send Britain into a double-dip recession.

Strange to say, Britain’s recovery stalled soon after Cameron/Osborne began their new policies, and the country is now in a double-dip recession.

Up to a point, Lord Copper. You’d be hard pressed to make a case for Osborne’s success but, as the chart above demonstrates, you’d be just as hard-pressed to make the case that the programme of fiscal austerity that Osborne has actually delivered – which should not be confused with that which he promised – is markedly different from that which his predecessor, Alistair Darling, proposed prior to the last election.

It’s true that, over the course of the whole parliament Osborne hopes to achieve a small reduction in total spending whereas Darling planned to keep spending flat but, really, this is a difference of degree not kind.

In other words, you can make a plausible case that just as, in broad terms, Gordon Brown stuck to Ken Clarke’s spending plans for his first two years as Chancellor (not coincidentally his most accomplished years at the Treasury) so, again broadly speaking, Osborne has kept faith with his predecessor’s plans. He may not have wanted to but, so far, that’s what he has actually done.

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