Bill Clinton has warned that Britain's spending cuts could end up raising the deficit. He is the highest profile critic yet of the coalition's economic strategy.
Bill Clinton yesterday warned David Cameron that Britain’s spending cuts could end up raising the deficit. He becomes the highest profile critic yet of the Tory-led coalition’s economic strategy.
Speaking at the annual Campus Progress conference in Washington DC, the former US President said:
“In the current Budget debate there is all this discussion about how much will come from spending cuts, how much will come from tax increases. Almost nobody’s talking about one of the central points that everyone who’s analysed this situation makes – including the bipartisan Simpson-Bowles Commission – which said you shouldn’t do any of this until the economy is clearly recovering.
“Because if you do things that dampen economic growth. And the UK’s finding this out now. They adopted this big austerity budget. And there’s a good chance that economic activity will go down so much that tax revenues will be reduced even more than spending is cut and their deficit will increase.”
The warning follows concerns a fortnight ago from the head of the respected Institute for Fiscal Studies think tank, that “the prospects for growth certainly don’t look rosy” and that a Plan B might be necessary if the OBR downgraded its predictions of growth. The chief economist of the OECD, Pier Carlo Padon, has said recently, “we see merit in slowing the pace of fiscal consolidation if there is not so good news on the growth front.” Even the IMF said earlier this month that there are, “significant risks to inflation, growth and unemployment”.
US gross federal debt (Table 7.1) was 66.1 per cent when Bill Clinton became president in 1993 and had fallen to 56.4 per cent when he left office in 2001. In 2001 – after eight years of George Bush – it had risen again to 83.4 per cent.
49 Responses to “Clinton: UK’s austerity budget could mean deficit will increase”
Leon Wolfson
Ed;
I initially thought the OBR was a genuine effort. Then Sir Alan Budd was forced out, and I started calling it the OBF. The way they’ve shaped over-enthusiastic predictions for the government has put the nail in the coffin of any idea of their independence for me.
While we live in a global economy, most of that economy is doing a LOT better at this “recovery” thing than we are, not least because they didn’t start slashing spending for longer, and now THEY’RE starting to see a stall too. This is predictable, and predicted.
And once more, I am NOT talking about exclusion from a few regions in London. I am talking about *two-thirds of the country*. I *wish* I was engaging in hyperbole, but that is what poorer people are facing!
Anon E Mouse
matthew fox – The clear glee you show that UK manufacturing fell in this country illustrates exactly why Labour and it’s activists care only for the tractor statistics in this country and deserve the kicking they are currently getting in the polls.
You’re right – of course I’m not pleased when working class people in this country lose their jobs due to a lack of manufacturing orders.
Obviously being the lickspittle you prove you are in most of your comments here, it means the plight of the workers is of little concern to you.
There used to be a time the Labour Party cared about the workers but your callous remarks against that particular demographic would indicate those days are long long gone.
Well done matthew fox….
Leon Wolfson
Glee? Everything you blame him for is your party’s responsibility. Your ability to dodge is on a par with the NoTW’s, and is about as welcome to the public.
Anon E Mouse
Leon Wolfson – My party was Labour my whole life pre Brown. Lib Dem now FYI.
No one is dodging – it’s just we have different views on things like fairness clearly and you will twist, turn and spin like a washing machine to justify the unjustifiable Leon Wolfson.
matthew fox is a not so bright Labour lacky, who would swear black was white or vote for a monkey in a red shirt. The coalition government prays for people of his ilk in the way they thought heaven was on earth when the hopeless Ed Miliband was forced on the party by the union dinosaurs.
Me I’m a Charles Clarke or John Reid type of admirer and less of a Damian McBride or Gordon Brown fan and you sir, as usual, are ignoring the point about his glee at the flatlining economy or the past where Labour wouldn’t have knighted failed bankers and cared about ordinary workers…
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