To those who do not read the Touchstone blog from the TUC I warmly recommend it. This fascinating insight was on there yesterday, written by Geoff Tily, an outstanding Keynsian economist who is now head of economics at the TUC:
A second look at historic GDP data shows the current ‘recovery' is the slowest on record (which extend back to 1830), rather than the slowest recovery in modern history, as we reported yesterday. This chart shows index numbers of recoveries in GDP from the bottom of each recession to five years later. The current ‘recovery' is in black: it falls short of all historic recoveries by a very long margin.
Recoveries from recessions from the 1830s to today
The figures are based on the Bank of England's historic database (up to and including the recovery from 1947); ONS National Accounts are used for the rest, with data for the latest ‘recovery' now extending to 2014 for the first time, following yesterday's GDP release. (To keep it tidy, I have defined a recession as two consecutive annual falls in GDP.)
These figures show growth of 8.8% over the five years since 2009, the low point of the latest recession. The average growth over the five years for all other recessions was 16.1%, nearly double today's effort. On this basis we are even underperforming the disastrous economic age that followed the First World War and the Geddes Axe spending cuts.
So much for "we have a plan and we're sticking to it". That would seem like an act of considerable folly in the light of the evidence.
Disclosure: I do work for the TUC on occasions, and right now is one such occasion.
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But isn’t the argument going to be that this time was different and with the exception of the US, we are doing better than any other major economy. The US increased public spending sharply, the UK increased it slowly and the EU tried to cut it in places. So I guess the figures show that austerity doesn’t work. Of course, we’ve not had austerity in the UK (public spending grew from £673bn in 2010 to £714bn in 2014).
So, austerity doesn’t work, the UK hasn’t had austerity, the Tories say we have had austerity and it works, Labour say we have had austerity and it doesn’t work and people wonder why politicians are held in low esteem!
Roger
That’s nonsense
There have been cuts if more than 30% in many government budgets
Of course we have had austerity
We are scheduled to have much more
If it’s not austerity what would you call it? Targeted abuse of the most vulnerable?
Richard