Press Releases | Budget, Taxes, and Public Investment

News from EPI A tale of two economies

For Immediate Release: Thursday, April 26, 2012
Contact: Phoebe Silag or Karen Conner, 202-775-8810

A tale of two economies

In the summer of 2010, the newly-elected conservative government of the United Kingdom passed and implemented a large austerity budget that was heavily weighted to spending cuts—80 percent of the total consolidation—and included an average 25 percent cut to non-health domestic departmental spending. Today’s Snapshot shows that Britain’s austerity package caused the British economy to slow significantly and its unemployment to rise. In contrast the U.S. economy, which avoided austerity on the massive scale that Britain adopted, has grown consistently (albeit more slowly than what’s needed) and added more than two million jobs in the last year-and-a-half.