The Broader Market

by Jordan Eizenga

A month ago, I had written about the illogic of implementing spending cuts to prevent currency devaluation.  Nick Clegg, the British Deputy PM, had stated on an American talk show that austerity measures were necessary to maintain the value of the pound sterling.  Yet, the Cameron-Clegg government has implemented its spending cut plan and the exact opposite seems to be happening.  

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By Jordan Eizenga

Amidst the hoopla over David Cameron’s supposedly radical austerity measures come economic projections that estimate a slowdown in economic activity in the United Kingdom.  Cameron and his Chancellor of the Exchequer, George Osbourne, have made clear their desire to cut spending in an effort to shore up its fiscal position.  The argument for doing so is that it paves the way for long-term economic growth by cutting the deficit.  Interestingly, the UK population seems resigned to the fact that spending cuts are inevitable (though they are far less supportive of tax hikes). 

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