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02/05/2012: "Economic Ills and So-called Austerity"

Letter to the Saskatoon StarPhoenix:

In the article, "Economic Ills" (SP Feb 4, 2012*), the argument is presented that austerity budgeting in Britain in particular has made their economic situation much more painful and enduring. I am curious however how Paul Krugman, and by proxy the Star Phoenix editorial board, can justify the claim that Britain has pursued any kind of austerity budget.

In fact, British government spending has risen every year since the start of the financial crisis, even after adjusting for inflation*. The British deficit is the third largest in the world, measured as a percent of GDP, after only Egypt and Greece*. Projected government spending in real terms for the next four years is flat -- that is, neither increasing nor decreasing. Since government spending projections are rarely on the high side, this too points against austerity budgeting.

The United States too are used as an example, but there too both Bush and Obama instituted massive spending increases in response to the financial problems.

The claim that problems in these countries could be a result of austerity budgeting would be laughable if it wasn't so frustrating to hear repeated.

Update: Printed as "No austerity"