No, not the US government, even though the media will be talking up the “savage” spending cuts coming because of sequestration (which will only reduce the rate of increase, not actually reduce spending). In this case it’s Britain:
Why is Britain growing more slowly than other developed nations? Why have we been outperformed over the past 12 months by every EU state except Greece, Ireland, Portugal and Romania?
Let’s start by dismissing the Labour-Guardian-BBC explanation: the idea that the economy is shrinking because of ‘the cuts’. As this blog never tires of pointing out, net government expenditure is higher now than it was under Gordon Brown. We are set to borrow at least £122 billion this year. Spending is above 50 per cent of GDP. How much more ‘stimulus’ do critics want?
What the international league tables show is that the countries which decreed the biggest bailouts experienced the sharpest contractions. Far from ‘stimulating’ the economy, these various programmes have taken money out of the productive sector. If stimulus spending worked, the Soviet Union would have won the Cold War.
