Transatlantic Deficits

I don’t know if the Obama administration is as enthused by the idea of deficit reduction as James suggests, not least since the American left has looked at George Osborne’s approach and judged it a failure. Kevin Drum, for instance, says Osborne’s plans are “not likely to work” and Britain “is probably going to be paying the price for this folly for many years to come”. Matt Yglesias agrees, writing that “Austerity’s failure in the United Kingdom should inform the American policy debate.”

This is all occasioned by a gloomy New York Times article with the headline British Deficit Defies Advocates of Austerity. But if the economy remains weak, inflation is too high and retail spending is down there are, as Stephanie Flanders pointed out this week, some better signs too:

The number of people in work has risen by an impressive 143,000 – and, for once, the rise has been driven by an increase in full-time work.