On June 5, British paper the Observer ran a letter from 52 economists begging Prime Minister David Cameron and Chancellor of the Exchequer George Osborne to rethink their radical plan to lower government spending.
“Recent economic figures have shown that the government urgently needs to adopt a Plan B,” said the letter.
Then came a rare bit of good news for the Prime Minister: an International Monetary Fund report urging Cameron and Osborne to stick to their plan. “Strong fiscal consolidation,” wrote the IMF, “remains essential to achieve a more sustainable budgetary position.”
The arguments over Cameron’s plan are heating up as the Conservative-Liberal Democrat government presses on with the biggest budget squeeze since World War II.
The government envisions about £80 billion of spending cuts plus £30 billion of tax increases over the next four years. Some £6 billion in efficiencies were realised by the government in its various departments.