Pain of British Fiscal Cuts Could Inform U.S. Debate

[Lydia Leftcoast]

...But in Britain, one year into its own controversial austerity program to plug a gaping fiscal hole, the future is now. And for the moment, the early returns are less than promising.

Retail sales plunged 3.5 percent in March, the sharpest monthly downturn in Britain in 15 years. And a new report by the Center for Economic and Business Research, an independent research group based here, forecasts that real household income will fall by 2 percent this year. That would make Britain’s income squeeze the worst for two consecutive years since the 1930s.

All of which has challenged the view of Britain’s top economic official, George Osborne, that during a time of high deficits and economic weakness, the best approach is to aggressively attack the deficit first, through rapid-fire cuts aimed at the heart of Britain’s welfare state...

Already the government has had to slash its growth estimate to 1.7 percent, from 2.4 percent, for this year, as consumer incomes are under pressure from high inflation, weak wage growth and stagnant economic activity.

More at

http://www.nytimes.com/2011/04/15/business/global/15iht-pound15.html?_r=1&hp
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You mean cutting 300,000 government jobs isn't going to bring about prosperity? Who'd a thunk it?

[Hawkowl]

1. Duh!

The draconian cuts are not supposed to improve the economy. They are to ensure that the bondholders get paid. The bondholders are almost exclusively the wealthy. So eat shit and give them their money.

That is the argument Obama is buying into. All this focus on the deficit nonsense will send us right back into recession. We are making the same EXACT mistakes as the Congress did in the 30's. Too bad Mr. Obama didn't study history or economics instead of Constitutional law.