Austerity failed: debt increased
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Austerity failed: debt increased
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For fifteen years, politicians have told us the same story.
They say Britain’s debt is too high. Government spending must be cut. Public services must be squeezed. Austerity is necessary because debt must come down.
There is just one problem. It ha never worked.
Before the financial crisis, UK government debt was around £500 billion. Today it is more than £2.8 trillion. Every year of austerity was supposed to reduce borrowing and reduce debt. Instead, debt rose year after year. It's never stopped.
So why are the same economists, newspapers and politicians who promoted austerity still demanding more cuts?
In this video, I examine the evidence. I explain why austerity can actually increase debt, why cutting spending reduces economic activity, why tax revenues fall when growth is suppressed, and why attempts to balance government finances often end up producing the exact opposite result.
If a medicine makes a patient sicker every time it is prescribed, doctors stop using it. So, why do economists keep prescribing austerity?
The numbers are clear. The evidence is clear. Debt-cutting has failed.
The question is why so many people refuse to admit it.