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Is Anybody Surprised that Krugman Was Wrong about U.K. Fiscal Policy?

cjurgens Wrote: Jan 24, 2013 11:48 AM

Right, when a private sector business finds itself in a position where it cannot sustain its expenditures, it starts cutting costs. Employees are laid off or redeployed, raises are delayed, processes are examined for efficiency improvements, new business opportunities are considered and so on. The point being that the company survives to see a healthy future. Have we ever seen government act this way?

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Is Anybody Surprised that Krugman Was Wrong about U.K. Fiscal Policy?

Just like in the United States, politicians in the United Kingdom use the deceptive practice of “baseline budgeting” as part of fiscal policy.

This means the politicians can increase spending, but simultaneously claim they are cutting spending because the budget could have expanded at an even faster pace.

Sort of like saying your diet is successful because you’re only gaining two pounds a week rather...