Reply #6: Outside the US, yes [View All]

[Spider Jerusalem]

Here is a group of leading academic economists in the UK calling on the government to move to "plan b" for the economy:

A hundred leading economists have made an impassioned call for the government to step back from the brink of a new economic crisis and back a Plan B to save existing jobs and create new ones, amid growing fears of a double-dip recession.

In a letter to the Observer, the umbrella group of distinguished experts from across the country argue that the chancellor must rethink his strategy and enact emergency measures to kickstart growth and save the UK from growing unemployment and a further fall in living standards.

Condemning the intransigence of the chancellor, George Osborne, as he pursues the coalition government's austerity programme, the economists write: "It is now clear that Plan A isn't working. Wave after wave of economic figures… have all concluded the British economy is faltering." And they warn: "Doing nothing is not an option."

http://www.guardian.co.uk/politics/2011/oct/29/george-osborne-plan-b-economy

And here's the shadow chancellor of the exchequer saying more or less the same (note for Americans who are possibly confused by parliamentary government; Her Majesty's official opposition...in this case the Labour Party..."shadow" their counterparts in government, the idea being that in the event of an election being called they're ready to seamlessly take over the reins of government).

Three years after the Wall Street crash of 1929, and with the world still mired in recession, the US elected a president whose determination to forge a "new deal" rescued America from depression and set an example to the world. Three years on from the global financial crisis of 2008, and with the developed world again mired in economic stagnation, that same vision and "new deal" determination is badly needed across the world.

You either learn the lessons of history or are condemned to repeat its mistakes. And to be fair, in the face of indebted banks and cautious consumers and companies, central banks have striven not to fall in that 1930s trap – providing liquidity to keep credit flowing in the face of very low interest rates. But so far our politics has not responded in kind. Yes, the worst of 1930s-style protectionism has been avoided. But on fiscal policy, where the world needs Roosevelt-style clarity and purpose, deflationary policies continue to undermine jobs and growth.

America, the eurozone and Britain: three currencies stuck with stagnating growth, high unemployment and high deficits; three very different governing "coalitions" facing political deadlock when a change of course is desperately needed.

First, in America we see the most familiar and easy to understand political deadlock. President Obama has made the case for a balanced plan to support jobs and growth alongside medium-term deficit reduction. But his clarity of purpose was badly undermined by Republican political brinkmanship over the debt ceiling this summer.

http://www.independent.co.uk/opinion/commentators/ed-balls-collective-austerity-risks-catastrophe-but-where-are-the-leaders-to-take-us-off-this-path-2376282.html