Krugman Slams Austerity Drive

The government’s austerity drive is “deeply destructive” and “failing miserably”, according to Nobel prize-winning economist Paul Krugman.

Speaking on BBC Radio 4’s Today programme, Krugman said he believed that instead of cutting spending the government should be increasing it by 2% of GDP.

“It is deeply destructive to pursue austerity in a depression,” Krugman said. “Give me a stronger economy and I’ll turn into a fiscal hawk. But not now.”

Krugman’s comments follow a lecture the American gave at the London School of Economics where he argued that David Cameron’s government had made a terrible mistake in opting for austerity, but could not change course and admit its failure.

Citing the Financial Times’ Martin Wolf, on his New York Times blog: “It may be humiliating for the government to offer such a speech now. But there is no reason why the people of the UK should suffer for its mistake, indefinitely.”

“But there is a reason, of course: the ambition and vanity of politicians. Hello, Mr Clegg,” Krugman added.