Jeepers, what a dumb polling question that is!

“The government should change its strategy to concentrate on growth, even if it means the deficit gets even worse”

You can see the blind misunderstanding of macro economics driving it.

If you get growth, the deficit will fall, not get worse.

What we have is a deepening recession and, as a direct result, the deficit beginning to worsen.

In these conditions spending cuts have never closed a deficit.

Alongside what BenM says @1, that polling question has a pointless word – “even” – that does nothing but bias people against encouraging growth.

What functional advantage does “even worse” have over “worse” except to make the whole concept sound worser?

If you get growth, the deficit will fall, not get worse.

That’s not a given. If you increase Government spending by more than the (potentially) associated increased tax revenues, then the deficit will get larger. We’re back to the old question about the effect of multipliers in an open economy.

Your approach is “increased Government spending pays for itself in increased economic activity and associated tax revenues”. That’s the direct equivalent to “tax cuts pay for themselves in increased economic activity and associated tax revenues”. The evidence for either proposition is a bit sketchy…

TJ @ 3:

“The evidence for either proposition is a bit sketchy…”

Exactly! Well said.

CG @ 2: elegantly put. But, unfortunately, this is (mostly) a propaganda site, rather than a forum for genuinely questioning and refining left-liberal ideas.

@ 4 TONE

“But, unfortunately, this is (mostly) a propaganda site, rather than a forum for genuinely questioning and refining left-liberal ideas.”

A lot of the time, yeah. Although it does get some good third-party writers and can be interesting in the comments.

On the subject of propaganda, I should clarify that I do not think YouGov’s leading phrasing is an attempt to skew the data. I think it’s just poorly written.

With all the political huffin’ and puffin’, surprisingly little or no effort is made to refer to any of the (extensive) professional literature on estimates of the empirical magnitude of fiscal tightening – or “consolidation”. Try this IFS study from 2011 which looks into the magnitude of the effect on GDP of fiscal tightening:
http://www.ifs.org.uk/budgets/gb2011/11chap4.pdf

The broad conclusion is that fiscal tightening, amounting to 1% of GDP, has a NEGATIVE effect on GDP in subsequent years – but the magnitude depends on whether the modelled economy is “large” or “medium” in size, whether the consolidation is “go-it-alone” or part of a global policy of consolidation, and upon what is happening with interest rates.

Most of the fiscal tightening has yet to come.

I found Einstein’s definition of “insanity” illuminating: “doing the same thing over and over again and expecting different results.”

Perhaps other contributors might like to post up more links to the empirical literature estimating the magnitude of Multipliers. The IFS study includes some links.

@ Bob B

On the other hand, there are several papers out there from well respected sources (ECB, Reinhardt and Rogoff etc) showing that when a country’s national debt/GDP ratio exceeds approx 90% long term growth is decreased by about 1%.

So which would you rather have, especially considering that governments are usually pretty terrbile at cutting spending and the national debt can escalate into crisis territory, which will do much more harm to growth than a bit of fiscal consolidation.

Tyler: “On the other hand, there are several papers out there from well respected sources (ECB, Reinhardt and Rogoff etc) showing that when a country’s national debt/GDP ratio exceeds approx 90% long term growth is decreased by about 1%..”

Why not try looking at the empirical evidence on national debt?

- [Britain's] Public sector net debt was £1,038.3 billion at the end of June 2012, equivalent to 66.1pc of GDP Source: Office National Statistics publications (page updated July 25th, 2012)
http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/

- In the late 1940s, after WW2, Britain’s national debt as a percentage of national GDP was over 200pc. Somehow we managed to get to 2007 before the banks and bankers crippled Britain’s economy – recall that BBC Today interview with Bob Diamond on 4 November last year in which he said that the banks must accept responsibility for what went wrong. On the history of Britain’s national debt over the last century or so, try the Wikipedia entry for: United Kingdom National Debt.

- How come Italy and Belgium were admitted to the Eurozone in 2000 with national debt to GDP ratios of more than 100pc?

I really expect those claiming to believe the “austerity leads to growth” meme would go to the trouble of doing their homework on the academic estimates of the value of the Multiplier. All that I’ve seen show fiscal consolidation or tightening leading to reduced GDP in future years and the government has only just started on public spending cuts. If we really believed that more debt would cripple Britain’s economy for the foreseeable then why didn’t we do a deal with Nazi Germany in May 1940 and opt out of the war?

In case anyone thinks I’m way out, try this:

Think-tank says austerity is harming UK growth and employment
NIESR predicts the UK economy will contract by 0.5 per cent in 2012A leading think tank has warned that unemployment could do permanent damage to the UK and that the economic weakness seen in the UK is “unprecedented”.

The National Institute of Economic and Social Research (NIESR) says that the UK economy will contract by 0.5 per cent this year and then grow by 1.3 per cent in 2013 and by 2.4 per cent in 2014.

NIESR says that had the austerity measures been delayed from 2011 to 2014, the economy would have delivered £239 billion more economic output and a200,000 jobs could have been saved

The think-tank also warns that austerity measures may have cost the UK’s GDP up to 16.5 per cent in cumulative economic growth.
http://www.myfinances.co.uk/pensions/2012/08/05/niesr-calls-on-uk-to-delay-austerity-to-boost-economic-growt