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Questo articolo è stato pubblicato il 27 ottobre 2010 alle ore 14:01.
BERKELEY – At the end of 2008, as the financial crisis hit with full force, the countries of the world divided into two groups: those whose leaders decided to muddle through, and China. Only the Chinese took seriously Milton Friedman’s and John Maynard Keynes’s argument that, when faced with the possibility of a depression, the first thing to do is use the government to intervene strategically in product and financial markets to maintain the flow of aggregate demand.
Then, at the start of 2010, the countries that had been muddling through divided into two groups: those where government credit was unimpaired continued to muddle through, while countries like Greece and Ireland, where government credit was impaired, had no choice but to pursue austerity and try to restore fiscal confidence.
Today, another split is occurring, this time between those countries that are continuing to muddle through and Great Britain. Even though the British government’s credit is still solid gold, Prime Minister David Cameron’s administration is about to embark on what may be the largest sustained fiscal contraction ever: a plan to shrink the government budget deficit by 9% of GDP over the next four years.
So far, China is doing the best in dealing with the financial crisis. The mudding-through countries lag behind. And those where confidence in the government’s liabilities has cracked, forcing the government into austerity, are doing worst.
Now the question is: will Britain – where confidence in the government has not cracked and where austerity is not forced but chosen – join the others at the bottom and serve as a horrible warning?
Cameron’s government used to claim that its policies would produce a boom by bringing a visit from the Confidence Fairy that would greatly reduce long-term interest rates and cause a huge surge of private investment spending. Now it appears to have abandoned that claim in favor of the message that failure to cut will produce disaster. As Chancellor of the Exchequer George Osborne put it:
The emergency Budget in June was the moment when fiscal credibility was restored. Our market interest rates fell to near-record lows. Our country's credit rating was affirmed. And the IMF went from issuing warnings to calling our Budget ‘essential’ Now we must implement some of the key decisions required by that Budget. To back down now and abandon our plans would be the road to economic ruin.