Deficit spending is becoming more popular
I’ve been following for a while a YouGov question on the central issue of how we deal with the crisis: should the government focus more on growth or on reducing the deficit?
When I last wrote about it the public were quite evenly split, following a shift towards more people wanting attention on growth.
Since then, the government’s emphasis on reducing the deficit regained support in the first quarter of this year.
Perhaps this was helped by Labour’s announcement in January that they wouldn’t necessarily reverse the cuts – though I doubt this did too much to public opinion, and suspect the changing mood was more down to a relative lack of bad news on the economy and the government seeming fairly stable.
But since the budget and double-dip, the mood has shifted.
The proportion wanting more attention on growth, even if the deficit gets worse, is now 11pts greater than the numbers who want to focus on reducing the deficit.
This is a 15pt shift from the position two months ago, and 20pts from where we were in July last year:
In December last year, Daniel Finkelstein argued that the view that we should borrow more to borrow less “is never going to work politically. Ever.”
As Jonathan Freedland wrote in reply, that categorical assertion may be too strong. It might have been the case that the option was unacceptable to too many people then, but “where the economics leads, the politics will surely follow.”
Regardless of the economic validity of focusing more on growth than the deficit, the public have become more receptive to a different economic approach.
But Keynesians should still be cautious: fewer than half support their approach, and even the return to recession didn’t make a huge difference to opinion. The ground may be becoming more favourable but it is still far from secure for an Hollande-style refutation of austerity.