Pesky facts and actual experience having comprehensively destroyed the supposedly practical arguments once presented in support of fiscal austerity, the question now is why are they still at it. The answer, scanning thru George Osborne’s recent mansion house speech, is simple; dogma.
So there you are then. Why are libraries closing? The public sector’s too big. Benefits being cut? Again, because the public sector is too big. Roads a pot-holed mess? The country was living beyond its means.
Obvious really, except this is moralising tosh that only merits attention because of who is trotting it out given (a) the long-term damage to Britain’s productive capacity fiscal policy continues to wreak (as per the recent growth in long-term unemployment), (b) the strong negative correlation - pointing to causation - between fiscal austerity and economic growth and (c) as examples of rank rotten nasty dogma.
As ever, big dods of Keynes are needed here. One, because, as he observed, an increase in debt funded public sector spending on infrastructure is needed to take up the slack left by a cautious private sector and two because, in place of dogma, as he wryly observed, "When the facts change, I change my mind. What do you do, sir?