A Surprising Comparison of U.S. and U.K. Economic Growth

The United States and the United Kingdom responded to the Great Recession in different ways. The U.S. passed an $800 billion stimulus bill whereas the U.K. in contrast kept government spending roughly flat in real terms. Some devotees of Keynesianism forecast that the U.S. would soar economically and the U.K. would descend into depression. Some supporters of austerity claimed that the reverse would happen, with the freespending U.S. going under the waves as Britain righted herself and steamed ahead.

The latest issue of The Economist provides recent economic growth data and 2014/2015 projections for both countries. Before you look at the table, make a guess as to which country has a booming economy and which one is mired in recession.


Surprising isn’t it? But don’t expect the similar levels of growth in the two countries to shake many people’s faith in their economic views. Most of the “slim government” crowd will argue that Britain didn’t cut enough (or that the U.S. growth isn’t real) and that’s why the U.K. hasn’t left the U.S. in the dust. Most increased government spending supporters will see proof that the stimulus wasn’t big enough (or that the U.K. growth isn’t real) because if it had been U.S. growth would be dwarfing that of the sceptred isle.

Many people seem to have stable preferences about whether they want government bigger or smaller. They will point to current economic conditions as the reason for why their preferences should prevail, but their preferences do not change when those putatively justifying economic conditions fade away. Neither are most people fazed when the government spending policies they support (as well as those that they oppose) deliver different results than they expected. Motivated reason is such a force in this particular policy area that rather than arguing over what current economic conditions particularly require, debaters are probably better off cutting to the chase and arguing directly about the real issue: Disagreement about how big or small we want the government to be.

Author: Keith Humphreys

Keith Humphreys is the Esther Ting Memorial Professor of Psychiatry at Stanford University and an Honorary Professor of Psychiatry at Kings College Lonon. His research, teaching and writing have focused on addictive disorders, self-help organizations (e.g., breast cancer support groups, Alcoholics Anonymous), evaluation research methods, and public policy related to health care, mental illness, veterans, drugs, crime and correctional systems. Professor Humphreys' over 300 scholarly articles, monographs and books have been cited over ten thousand times by scientific colleagues. He is a regular contributor to Washington Post and has also written for the New York Times, Wall Street Journal, Washington Monthly, San Francisco Chronicle, The Guardian (UK), The Telegraph (UK), Times Higher Education (UK), Crossbow (UK) and other media outlets.

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