longandvariable

George Osborne and fellow Conservatives are attempting – seemingly with success – to run the argument that the fact that the economy is now growing quickly proves that their austerity policy was the right one.  The message gets pumped out by the Tory Party, and everyone that wishes them well.  For example, I subscribe to tweets from an old Bank of England colleague Tim Montgomerie, now Times columnist and influential thinker on the right, and this is one of his staple retweets.  Although the silliness has been countered already by others, it seems appropriate to fight repetitive twaddle with repetition.  And while I’m at it, it’s worth recapping on the multiple mistakes made since the Coalition took over.

Modern macro theory suggests that economies will eventually return to growth unless governments kept contracting fiscal policy.  The Coalition’s plan involved a slow reduction in fiscal drag.  This reduction in drag…

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