When governments cut their deficits when the private sector is still shell-shocked by slump, the situation only gets worseMinisters are up to their old game of blaming everyone but themselves for Britain’s economic woes. First, they said they were “clearing up the mess” left by Labour. When recovery stalled in 2010, it was because of the Greek crisis. Now David Cameron warns of a new recession even before it has happened– because Europe is not doing its job of recovering properly.Cameron is right to warn that the world is on the brink of a third recession. But he is wrong to say that this makes it even more necessary for Britain to stick to its “long-term economic plan” of deficit and debt reduction. Because it is these deficit and debt-reduction policies, implemented throughout the European Union, that have been causing the “red lights” of recession to start flashing. Continue reading...
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