Britain's economy is a riddle wrapped in a mystery inside an enigma, but this much is clear: it's a disaster. After its Olympics-fueled growth, such as it was, lifted it out of recession in the third quarter of 2012, Britain might be headed back after its economy fell 0.3 percent at the end of the year -- the fourth time in five quarters its GDP has contracted. Britain's now verging on a triple-dip recession, which is just another way of saying a depression.
Of course, The Atlantic being firmly in the MOAR SPENDING ELEVENTY!!!! camp of economic wisdom, the finger gets pointed at the normal location.
It's no accident this era of zero growth has coincided with an era of austerity. Despite entering office with borrowing costs at 50-year lows, the Cameron coalition decided the government deficit, and not the growth deficit, was the chief threat to future prosperity. It raised taxes and cut the growth of spending, but did so with little regard for what constituted smart cuts and what did not. As Portes points out, public net investment -- things like roads and bridges and schools, and everything else the economy needs to grow -- has fallen by half the past three years, and is set to fall even further the next two. It's the economic equivalent of shooting yourself in both feet, just in case shooting yourself in one doesn't completely cripple you.
The comment vultures then pile on, screaming about Krugman and Republicans and "demand" and so forth, all in the insane dance macabre that marks the pseudo-Keynesian true believers.
I have a simpler answer: the UK is getting what they pay for.
Natalija Belova, 33, told The Sun how she spurns full-time work — yet can afford foreign holidays and buys designer clothes.
The Lithuanian said: “British benefits give me and my daughter a good life.”
She has milked soft-touch Britain for £50,000 in benefits and yesterday said: "I simply take what is given to me."
In short: paying people not to work results in people not working.
People not working, but getting paid, results in nothing.
And for some reason, other countries and people actually creating value don't want to pay good money for nothing.
So in essence, the UK is pumping billions of pounds annually into something that has no value whatsoever to anyone.
Unless you count politicians' need to purchase votes.