John Cassidy, writing for the New Yorker website, analyses the Autumn Statement of Chancellor George Osborne and concludes, without doubt, that austerity policies are not working: 'At every stage of the experiment, critics have warned that Osborne’s austerity policies would prove self-defeating. Any decent economics textbook will tell you that, other things being equal, cutting government spending causes the economy’s overall output to fall, tax revenues to decrease, and spending on benefits to increase. Almost invariably, the end result is slower growth (or a recession) and high budget deficits. Osborne, relying on arguments about restoring the confidence of investors and businessmen that his forebears at the U.K. Treasury used during the early nineteen-thirties against Keynes, insisted (and continues to insist) otherwise, but he has been proven wrong'
http://www.newyorker.com/online/blogs/comment/2012/12/austerity-economics-doesnt-work.html
