Is the United Kingdom Savagely Cutting Spending?
In new Mercatus research, UK-based economist Anthony Evans goes in search of the data. He finds:
- The UK government’s response to the recession has been to eliminate the structural budget deficit over the medium term.
- There are changes in the composition of government spending but not a fall in the absolute level.
- Forecasts of falling government spending as a proportion of GDP are due to implausible growth forecasts rather than an absolute reduction in spending.
- History indicates that the government overestimates its ability to fund austerity through spending cuts, and therefore above-expected tax rises are likely.
Much more here, including lots of great graphs.