This week the United Kingdom joined the ranks of Portugal and Spain by sliding back into a recession. Critics have used this as an opportunity to jump all over David Cameron’s austerity measures, which he has vowed to stick with, International Business Times reports:
The dire figures fuel growing criticism of Britain's Conservative-Liberal Democrat coalition, as a broad backlash against strict austerity measures is building across Europe.
"The uncomfortable fact remains that the economy is in a desperately fragile state, despite unprecedented stimulus and financial support," said Neil Prothero, U.K. economist for Economist Intelligence in London. "This should come as no surprise, with the U.K. struggling to adjust to a severe (and rare) balance-sheet recession. The underlying picture is still one of very weak household consumption and business investment, exports being constrained by a stronger sterling and the inevitable escalation of the euro zone crisis, and government spending now acting as a drag on economic activity."
The New York Times's Paul Krugman has especially enjoyed Cameron's struggles, attempting to use them to shut up American pundits urging President Obama to take on austerity measures:
When David Cameron became PM, and announced his austerity plans — buying completely into both the confidence fairy and the invisible bond vigilantes — many were the hosannas, from both sides of the Atlantic. Pundits here urged Obama to “do a Cameron”; Cameron and Osborne were the toast of Very Serious People everywhere.
Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s.
But did the U.K. really apply the austerity measures that Republicans call for in the U.S.? And are the issues that the U.K. economy faces the same as the U.S.?
Will Cain says no.
On "Real News" Thursday Cain explained that you have to look at the total debt, the sum of both government and private debt, which shows the U.K. and U.S. going in oppositie directions. Cain argues that the U.K. has not even applied real austerity measures, for unlike the U.S., the U.K. total debt has risen because of the lack of cuts to private debt.
Matt McCall is not totally onboard with Cain's presentation, and believes the U.S. may be heading for similar economic downturn as our friends across the pond. McCall argues that the reason the U.S. private, consumer debt, has decreased is because the government has absorbed it. A practice that cannot continue too much longer.