Most economists never did believe it was wise, and they have not changed their minds – see here and here and here and here. The New Economics Foundation’s analysis showed that the impact of tax and spending changes since the Conservatives came to power had left the economy £100bn smaller than it would otherwise have been. That’s equivalent to £300 per month for the typical household.
Those on the front line, coping with the problems don’t believe in it. The British Medical Journal (BMJ) reported on the cost in lives prematurely ended as a result of austerity. Johnathan Watkins, Wahyu Wulaningsih and others, writing in the BMJ analysed the impact of spending cuts on health outcomes and reached the horrifying conclusion that, “Combining these projected excess deaths and the observed deaths prior to 2015 translates to around 120,000 excess deaths from 2010 to 2017. Contemporaneous reductions in life expectancy and excesses in measures of preventable death both validated our mortality findings.” These findings have not been seriously disputed.
And it is not just those whose lives are cut short who suffer, it is many of the most vulnerable in society. As Simon Pemberton, Eileen Sutton, Eldin Fahmy, Karen Bell pointed out in their paper, Poverty and Social Exclusion in the UK,
“Our participants’ testimonies suggest that the lived experience of low income has manifested in three specific ways during this time: [financial] pressure; insecurity; marginalisation.
First, life on a low income austere times has brought even greater material pressures, as the cost of living rose at a point where wages and benefit rates either stagnated or in many cases, fell in real times. Unbearable pressures have been exacted on already fragile household …
Second, our participants’ testimonies made constant reference to the sense of insecurity they felt. … Many of our participants, have moved between the low pay sector and the benefits system, and therefore their lives are perpetually impacted by the uncertainties these fields produce.
Third, the pejorative political and media portrayals of life on a low income significantly impact the lives of our participants. … the empathy and understanding displayed to those living on low income continues to erode, giving rise to a greater sense of dislocation for our participants from the rest of society. This is further compounded by the need for many living on low income to withdraw from social relationships to avoid the shame that results from the public revelation of their poverty.”
And yet, the architect of austerity, David Cameron, says that he wishes he had cut faster and deeper. Calling criticism of austerity, “pretty hysterical” and akin to if “we had reinstated the workhouse“, he went on to explain that “In 2010 there was absolutely no doubt what [my duty] was: to rescue the economy. It doesn’t require a degree in economics to appreciate that if you keep spending faster than the economy grows, and faster than tax revenue grows, eventually you will be in trouble.”
This is extraordinary, both in the extent of his denial of the consequences of austerity and the weakness of his argument that he had to impose austerity to rescue the economy. The chart below shows the reality of UK Government finances.
It shows clearly that there was no need to ‘rescue’ the economy. Yes, of course debt had risen as a result of what the Deputy Governor of the Bank of England called, “a once in a lifetime crisis and possibly the largest financial crisis of its kind in human history.” But, no, it had not risen to unusually high levels – in fact it was and remains below its average level over the last 300 years. A crisis that takes over 300 years to manifest is not a justification for massive cuts in response to what economists refer to as The Great Recession. Demonstrably, high levels of debt do not preclude economic success: debt was over 200 before the Industrial Revolution really took off, and over 250% before the Golden Age of Capitalism. Our two most successful economic eras were preceded by high debt.
Cameron’s argument that since, if you keep spending more than you earn you will eventually get into trouble, so you should never do it even for a short time is like advising people never to spend except on payday – complete nonsense.
Cameron’s real duty was to look after the welfare of the population of his country, and he manifestly failed to discharge that duty.
And now, we see the leader of the Liberal Democrats saying, “In 2010, we did need to make cuts” and talking about making tough choices implying of course that while they were tough on most people, they were necessary choices.
So the short answer to the question, who still believes in austerity? seems to be: David Cameron and Jo Swinson.