In Britain the Tory government’s austerity measures are working so well that they have created the worst double-dip recession in 50 years:
Shock 0.7% fall in UK GDP deepens double-dip recession
Britain’s economic output collapsed by 0.7% in the second quarter of 2012 as the country’s double-dip recession extended into a third quarter. …
Analysts in the City had expected a 0.2% drop in gross domestic product in the three months to June and were stunned by the scale of the fall in activity. The decline followed the 0.3% fall in the first three months of 2012 and a 0.4% decline in the final quarter of 2011. …
The news will come as a fresh blow to the chancellor, George Osborne, whose deficit reduction plans have been thrown off course by the poor performance of the economy. Output has declined in five of the last seven quarters.
Osborne said: … “We’re dealing with our debts at home and the debt crisis abroad. We’ve made progress over the last two years in cutting the deficit by 25% and businesses have created over 800,000 new jobs. “But given what’s happening in the world we need a relentless focus on the economy and recent announcements on infrastructure and lending show that’s exactly what we’re doing.”
Doesn’t it all sound very – familiar? A government with no plan except cutting spending is holding the economy back. The only thing that’s growing is the volume of the rhetoric, right down to the “relentless focus on blah blah blah”.
In NZ we technically avoided a double dip recession. Just. But we’re still stuck in the doldrums. The theory of “expansionary austerity” is nonsense. Government austerity has caused nothing but damage in Britain, and (lesser) austerity is causing nothing but (lesser) damage here. No doubt the economy will limp it’s way back to growth some time. No doubt the Nats, if still in power, will claim credit when it does. But the truth is that any recovery will be in spite of the Nats, not because of them.