Britain proves the folly of GOP economics
First slash spending. Then watch the economy contract
At the Tory enclave of Eton, the exclusive private school whose graduates now dominate the British Cabinet, they drink tea — and politically and economically, it's not terribly different from the faux-populist American brew. So the Etonian Conservatives came to office last year in coalition with the misnamed Liberal Democrats, and together they set about slashing government spending at a breakneck pace, much like Republicans long to do here.
The economic stimulus, which under the previous Labour government had stayed and reversed the recession, was withdrawn. And the policy course that Republicans insist is the single route to prosperity in the U.S. — massive public spending cuts — was afforded a proof of theory across the Atlantic. Conservatives there enacted exactly what Republicans propose here.
How did that policy fare in the real world?
First, some history. Growth rates in the U.K. bottomed out at the end of 2008. But the British economy began climbing back in 2009. By the time Labor Prime Minister Gordon Brown, who arguably saved not only the British but the world economy when George Bush dithered in 2008, lost last May's election, growth was in solidly positive territory — up 1.1. percent in the last quarter of his administration.
The wrongheadedness of GOP policy is now visible for all to see.
There was always a fear that the Conservatives were "novices" — that they couldn’t be trusted with the economy. This is almost certainly what deprived them of an outright parliamentary majority. But with their coalition partners, they managed to lay claim to Downing Street — and promptly set about chopping budgets and government at a fragile point in the recovery. Growth fell to 0.7 percent — and then in the last quarter of 2010, the economy went negative, shrinking by 0.5 percent. December brought the worst British retail sales in over a decade. A Bloomberg analysis put the situation bluntly: "Confidence plunged."