No one proclaimed the “age of Austerity” louder than the Tories of Britain and their Chancellor of the Exchequer George Osborne.
Three and a half years ago when the Tory coalition put Osborne in charge he proclaimed loudly:
He gave warning that failure to bring down the £175billion deficit quickly would threaten Britain’s future prosperity. “You cannot have a sustained recovery until you show the world that Britain can pay its way. And let me tell you, the world is watching Britain at the moment,” he said.
Three and a half years later, the UK is now experiencing not a double, but triple-dip recession.
What’s more all this austerity to bring down the debt has instead resulted in this:
In last year’s budget, Osborne predicted that government debt would peak at 76% of GDP in fiscal year 2014/15; but this week, despite (or because of) another year of Draconian tax increases and spending cuts, he has projected the government’s debt burden to keep rising for a further two years, to 86% in 2016/17. Contrast this with the U.S. budgetary experience, where the debt ratio has already stabilized near Osborne’s original 76% target, despite (or because of) the Republicans’ refusal to raise taxes and the Democrats’ refusal to cut spending on anything like the British scale.
Shhhh….don’t tell anybody in the beltway the debt has stabilized, they’ll look at you like a crazy and unserious person.
And in the wake of all this incredible non-success it became apparent this week that George Osborne is abandoning his policies, he just doesn’t want to say it yet.
Instead of trying to reduce borrowing any further or aiming for a balanced budget, as it originally promised, the British government has now accepted that deficits will keep rising in absolute terms and will still be worth 6% of GDP by the next election in 2015. That would leave Britain with by far the highest deficit ratio among the major economies after five years of unprecedented austerity. Meanwhile the U.S., with comparatively little fiscal effort, is projected to reduce its deficit to just 2.4% by 2015.
Enjoy getting booed George.