LONDON
“The boom, not the slump, is the right time for austerity.” So declared
John Maynard Keynes 75 years ago, and he was right. Even if you have a
long-run deficit problem — and who doesn’t? — slashing spending while
the economy is deeply depressed is a self-defeating strategy, because it
just deepens the depression.
So why is Britain doing exactly what it shouldn’t? Unlike the
governments of, say, Spain or California, the British government can
borrow freely, at historically low interest rates. So why is that
government sharply reducing investment and eliminating hundreds of
thousands of public-sector jobs, rather than waiting until the economy
is stronger?
Over the past few days, I’ve posed that question to a number of
supporters of the government of Prime Minister David Cameron, sometimes
in private, sometimes on TV. And all these conversations followed the
same arc: They began with a bad metaphor and ended with the revelation
of ulterior motives.
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