Here is Krugman on the terrible mess Cameron has made of Britain;s economy-totally unnecessarily as well
"When David Cameron became PM, and announced his austerity plans — buying completely into both the confidence fairy and the invisible bond vigilantes — many were the hosannas, from both sides of the Atlantic. Pundits here urged Obama to “do a Cameron”; Cameron and Osborne were the toast of Very Serious People everywhere."
"Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s."
"Britain is also unique in having chosen the Big Wrong freely, facing neither pressure from bond markets nor conditions imposed by Berlin and Frankfurt."
"Now, the defense I hear from Cameron apologists is that the austerity mostly hasn’t even hit yet. But that’s really not much of a defense. Remember, the austerity was supposed to work by inspiring confidence; where’s the confidence? Basically, the expansionary aspect should already have kicked in; it’s all contraction from here."
"Needless to say, Cameron and Osborne insist that they will not change course, which means that Britain will continue on a death spiral of self-defeating austerity."
What's important to see is that it could happen here. It's basically the Latvian model. It's also the Paul Ryan plan. Look I like some of the Market Monetarists. I even like Sumner a lot of the time. But he too is a proponent of the Latvian model. Surely it should not be lost that Britain has most closely followed Sumner's NGDP agenda.
What is not fully appreciated is that Sumner's gloss is that by having monetary stimulus it enables us to have fiscal austerity. That's what all this carping about the fiscal multiplier being roughly zero.
What is the Latvian model? It is the ultimate conservative wet dream. What they got was a 59% wage tax and almost 0% on property taxes. It fulled a huge bubble in all the Baltic economies while their workers led the world in emigration.
No matter how you want to look at it this is what all conservatives have in mind. Romney too though he;s now trying to distance himself from the congressional Republicans. How does that work after he spent so much time joined at the hip with Paul Ryan?
This is also why I have so little patience with all the liberal Obama bashers. He's the main reason until now anyway austerity has not happened here. If he is re-elected-as expect he will be it never will.