the coalitions economic strategy has clearly failed its missed its important targets, its assumptions in 2010 were all way off,and have diverged from econmic reality as each quarter has progressed
correlation does not imply causation but the Govt doesnt even have that wheras critics of austerity do - whats happend fits our arguments back in 2010.
we are now in the argument about why this is - to what extent its stuff out of the uk govts control etc .
they had an idea and tried it and it failed - politically i dont think this matters as much as people assume - full monetarism was tried in the early eighties and was also a dismal failure - what happend was that thatcher and the monetarists were able to change course without admitting it and the whole period was airbrushed out of the thatcher myth.
I just wonder what it takes for an economic strategy to be falsified ?
I suspect that what happens is that govts of whatever political shade just keep on banging away while the 'new paradigm' starts taking shape as the govt 'muddles through'. If your unlucky enough to be the govt at the end of the paradigm you end up making the major u-turn.
weve had osborne putting up the white flag last month with the further QE/credit easing to guarantee loans,. It probably wont work but its the last stop before FISCAl policy makes a return and at least the groundwork for using the govt balancesheet is there.
My impression is that unless there is a Euro collapse or an oil crisis
I think the Euro crisis provides the cover - If they leave it too late they wont be able to bullshit about low interest rates anymore because the 'money' end of the economy could be dominated by negative rates.