The Wages of Economic Ignorance

The impetus for this article by Lord Skidelsky is that politicians in the UK are blaming weak economic performance on the eurozone crisis. He believes that the government's austerity policy is the problem and it should not blame the poor performance of the economy on the eurozone which has its own problems. Skidelsky explains why austerity is not the appropriate response to a decline in private spending. He is critical of governments in the UK and elsewhere for using the recession and resulting budget deficits as the rationale for limiting the role of government in the economy. He turns to the eurozone crisis at the end of the article and concludes that a union is not possible when some countries have persistent current account deficits and there is no political will for greater fiscal and monetary integration.