by Summary:
No, says The Times' David Smith. He says that the notion that there was a pause in austerity is an "austerity myth".He points to this chart from the Office for Budget Responsibility that shows fiscal consolidation as a percentage of GDP (relative to the 2008 Budget) continuing on throughout 2013 and 2014 and 2015:But the OBR's chart doesn't actually show what I would define as austerity. It shows the size of the government budget as a percentage of GDP relative to previous budgets. That's a good deal of moving parts. And that creates a good deal of ambiguity. Under such a definition, if the economy grows and government spending stays constant, there has been fiscal consolidation. In fact, if the size of the budget grows but the economy grows more, there has still been "fiscal consolidation". What I am referring to when I claim that Osborne paused austerity in 2013 is the pause in the slashing back of government spending. Simply, up 'til 2013 the government was year on year cutting spending in real terms. The bottom came in 2013. In 2014 and 2015 — prior to the election — the government stopped cutting spending. This graph (via ukpublicspending.co.uk) shows that's true in real terms.
Topics:
Frances Coppola considers the following as important: austerity, benefits, cuts, Economics, fiscal policy, george osborne, obr, public spending, recovery, UK, welfare
This could be interesting, too:
No, says The Times' David Smith. He says that the notion that there was a pause in austerity is an "austerity myth".He points to this chart from the Office for Budget Responsibility that shows fiscal consolidation as a percentage of GDP (relative to the 2008 Budget) continuing on throughout 2013 and 2014 and 2015:But the OBR's chart doesn't actually show what I would define as austerity. It shows the size of the government budget as a percentage of GDP relative to previous budgets. That's a good deal of moving parts. And that creates a good deal of ambiguity. Under such a definition, if the economy grows and government spending stays constant, there has been fiscal consolidation. In fact, if the size of the budget grows but the economy grows more, there has still been "fiscal consolidation". What I am referring to when I claim that Osborne paused austerity in 2013 is the pause in the slashing back of government spending. Simply, up 'til 2013 the government was year on year cutting spending in real terms. The bottom came in 2013. In 2014 and 2015 — prior to the election — the government stopped cutting spending. This graph (via ukpublicspending.co.uk) shows that's true in real terms.
Topics:
Frances Coppola considers the following as important: austerity, benefits, cuts, Economics, fiscal policy, george osborne, obr, public spending, recovery, UK, welfare
This could be interesting, too:
Robert Skidelsky writes Speech in the House of Lords – Autumn Budget 2024
Lars Pålsson Syll writes Modern monetär teori
Lars Pålsson Syll writes Problemen med Riksbankens oberoende
Lars Pålsson Syll writes L’ascenseur social est en panne
No, says The Times' David Smith. He says that the notion that there was a pause in austerity is an "austerity myth".
He points to this chart from the Office for Budget Responsibility that shows fiscal consolidation as a percentage of GDP (relative to the 2008 Budget) continuing on throughout 2013 and 2014 and 2015:
But the OBR's chart doesn't actually show what I would define as austerity. It shows the size of the government budget as a percentage of GDP relative to previous budgets. That's a good deal of moving parts. And that creates a good deal of ambiguity. Under such a definition, if the economy grows and government spending stays constant, there has been fiscal consolidation. In fact, if the size of the budget grows but the economy grows more, there has still been "fiscal consolidation".
What I am referring to when I claim that Osborne paused austerity in 2013 is the pause in the slashing back of government spending. Simply, up 'til 2013 the government was year on year cutting spending in real terms. The bottom came in 2013. In 2014 and 2015 — prior to the election — the government stopped cutting spending.
This graph (via ukpublicspending.co.uk) shows that's true in real terms. In fact, in real terms UK government total spending is estimated to increase in 2014 and 2015:
There seems to be a similar pattern of a small uptick in real per capita terms, at least for fiscal year 2014 (there appears to be an error in the data for 2015 and 2016, so I left those years off the below chart):
Another interesting picture — via the St. Louis Fed's David Andolfatto — shows government spending per working age person, alongside government revenue and transfers: 
This shows much the same thing. During the Coalition years, revenue and transfers per capita remained relatively static. Spending fell throughout 2010, 2011 and 2012, bottomed out in 2013 and remained static through 2013 and beyond.
In other words, shake your fist all you like about the OBR's picture of fiscal consolidation, but the actual data on spending and transfers relative to revenue shows a pause in the austerity after 2013.
And no, that doesn't mean Osborne literally abandoned austerity altogether. He didn't reverse the cuts, if that's what someone might mean by "abandoning austerity". And the Tory manifesto promises more cuts henceforth. If that's what Osborne and co deliver in the coming parliament then that is the very opposite of "abandoning austerity".