The coalition government’s harsh austerity policy isn’t working, for the reasons the Liberal Democrats predicted in their 2010 manifesto. Even the IMF has advised the government to rethink its strategy and spend more. So why is the government refusing to change course?
As Paul Krugman explains, it is because George Osborne still believes in the confidence fairy. And the arguments for the existence of this fairy are utterly implausible.
What is the reason for Osborne’s stubborn persistence with this nonsense? Superstition, muddle or callousness? You decide.