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Sustainable Economy > Published by Will Straw, August 2nd 2011 at 3:25 pm

Coalition cuts are deeper and faster than Tea Party’s

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Right-wing commentators have been crowing that the US debt deal. Tim Montgomerie calls it a big victory for “small government” while Toby Young claims that the UK government has cut by a “smaller amount“. The truth is that the UK’s cuts are faster and deeper than anything in the Tea Party’s wildest dreams.

The independent Congressional Budget Office released estimates yesterday of the total effect on deficit reduction of the Budget Control Act 2011. It found that for 2012, the deficit would fall by $21 billion above and beyond the $83 billion deficit reduction set out in President Obama’s March budget. The total consolidation of $104 billion in 2012 equates to 0.7 per cent of US GDP. The Joint Select Committee on Deficit Reduction was tasked with finding an additional $1.5 trillion of cuts over 10 years. But even allowing for $150 billion of that to fall in 2012 only raises the total deficit reduction to 1.6 per cent of GDP. Nobel prize winner, Paul Krugman, has described the deal as a “disaster“.

By comparison, as the graph below shows, UK deficit reduction will hit £61 billion in 2012/13 or 3.8 per cent of GDP. While total accummulated UK deficit reduction rises to 6.6 per cent by 2015/16, the US hits a maximum of 2.5 per cent by 2014 falling to 2.2 per cent in 2015.

The data show that the UK’s deficit reduction remains faster and deeper than that planned by Congress. The right will argue that this is a necessary response to the UK’s large deficit which is expected to have been 9.9 per cent for 2010-11 and 7.9 per cent for 2011-12. But the US deficit is in a similar place at 9.3 per cent of GDP in 2011.

In his excoriating op ed for yesterday’s New York Times, Paul Krugman wrote:

“We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

“The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

“Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse.”

What he would make of our own cuts is anyone’s guess.

NB: Year 1 is 2011 for the US and 2011/12 for the UK. My calculations can be found here.

Hat-tip: Anthony Painter who despite being on holiday sent over the CBO tables.

UPDATE:

This blog and its graph have become subject to a debate at Coffee House. The graph above uses as its baseline, the budget proposed by Obama in March 2011 which included a modest fiscal easing. Accepting that this budget was made erroneous by the Budget Control Act, I have made new calculations which show the situation in an even starker perspective. The graph below is measured against the Congressional Budget Office’s March baseline and measures only the $2.5 trillion of cuts in the Budget Control Act. This includes the inclusion of $150bn in every year as a contribution towards the $1.5 trillion cuts over ten years that the Joint Select Committee is yet to make.

But we don’t need graphs to understand that the Coalition’s deficit reduction programme is faster and deeper than the Tea Party’s cuts.

Faster: At the National Review, Josh Barro writes:

“The deal includes a lot of spending cuts, but it’s important to understand how backloaded these cuts are. The headline figure is $2.5 trillion in cuts over ten years, but less than 1 percent of those cuts will come in FY 2012. The near-term fiscal changes are so small that they will matter very little for the economy. The long term changes will be subject to revision by future Congresses and will hopefully come when the economy is healthier—and the parts that do go into effect will probably not be that different from whatever fiscal adjustment we were going to have to enact sooner or later.”

Deeper: Using the CBO’s slightly odd approach of adding cumulative totals to get a five or ten year running total (eg $2.5 trillion over 10 years), we can see that the Tea Party’s cuts average 1.1 per cent of GDP over the five year period in question. By comparison, the Coalition’s deficit reduction comes to 4.9 per cent.

  • http://twitter.com/ciphergoth/status/98399407719989248 Paul Crowley

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/c_a_jonestechno/status/98399450950672384 CAROLE JONES

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/c_a_jonestechno/status/98399713329557505 CAROLE JONES

    Coalition cuts are deeper and faster than Tea Party's | Left Foot Forward http://lnkd.in/Jmb-nx

  • http://twitter.com/wdjstraw/status/98401264831971328 Will Straw

    @toadmeister You're wrong to say that UK cuts are smaller than Tea Party's. They are deeper and faster: http://bit.ly/piJX9b

  • http://twitter.com/jos21/status/98402002136072194 Jos Bell

    @toadmeister You're wrong to say that UK cuts are smaller than Tea Party's. They are deeper and faster: http://bit.ly/piJX9b

  • http://twitter.com/sodasinfonie/status/98402201818501120 Amanda Hsieh

    Think the Tea Party's crazy? Think again. UK cuts "faster and deeper than anything in the Tea Party’s wildest dreams." http://t.co/u07CukM

  • http://twitter.com/petejefferys/status/98402456777654273 Pete Jefferys

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/CxzcrDZ

  • http://twitter.com/meadwaj/status/98402968541462528 James Meadway

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/joshnavon/status/98404003972526080 Josh Navon

    Think the Tea Party's crazy? Think again. UK cuts "faster and deeper than anything in the Tea Party’s wildest dreams." http://t.co/u07CukM

  • http://twitter.com/andrewburgin2/status/98404215914901504 andrewburgin

    UK cuts worse than those in US Tea Party debt deal. http://fb.me/UTjjzIay

  • http://twitter.com/spikeisland100/status/98404427660136448 Paul Krishnamurty

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/mike1981notts/status/98406880493314048 michael long

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/alasdairbain/status/98407588626046976 Alasdair Bain

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/sph1984/status/98408872506695680 Simon Hughes

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/georgeeaton/status/98409171032096769 George Eaton

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/liversedge/status/98410653601112064 liversedge

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/ns_mehdihasan/status/98411315189661697 Mehdi Hasan

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/lorcan_mullen/status/98411699794743296 Lorcan Mullen

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/lauramaystorey/status/98413358071549952 Laura

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/jamesmills1984/status/98413439575265280 James Mills

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/martinmcgrath/status/98413952203104258 Martin McGrath

    Think the Tea Party are barmy? UK Conservatives make them look… conservative… on over-enthusiastic debt reduction http://bit.ly/ooSrK7

  • http://twitter.com/therightarticle/status/98414159481417728 Michael

    Coalition cuts are deeper and faster than Tea Party’s l Left Foot Forward – http://j.mp/pLEPlg

  • http://twitter.com/johnwest_journo/status/98416326208524289 John West

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/anthonypainter/status/98419577444241409 Anthony Painter

    There are people both on the left and the right who should read this @wdjstraw blog on tea party cuts v the coalition's http://t.co/SDN8IZR

  • http://twitter.com/anthonypainter/status/98420189699387392 Anthony Painter

    Hence tweet earlier about left's betrayal overreaction and right's misplaced triumphalism. #coalition cuts more severe. http://t.co/SDN8IZR

  • http://twitter.com/ashleyharnett/status/98420213028110336 Ashley Harnett

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/OVt3mf3

  • http://twitter.com/tomneumark/status/98420356452335616 Thomas Neumark

    There are people both on the left and the right who should read this @wdjstraw blog on tea party cuts v the coalition's http://t.co/SDN8IZR

  • http://twitter.com/jossgarman/status/98420730294841344 Joss Garman

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/inbq157 < interesting analysis by @wdjstraw

  • http://twitter.com/casparhenderson/status/98420861215842304 Caspar Henderson

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/inbq157 < interesting analysis by @wdjstraw

  • http://twitter.com/bristolpaul/status/98421312950775808 Paul Smith Bristol

    RT @anthonypainter: read this @wdjstraw blog on tea party cuts v the coalition's http://t.co/SDN8IZR

  • http://twitter.com/jimthehedgehog/status/98421373415858177 jimthehedgehog

    There are people both on the left and the right who should read this @wdjstraw blog on tea party cuts v the coalition's http://t.co/SDN8IZR

  • http://twitter.com/jamesmills1984/status/98422464106864640 James Mills

    There are people both on the left and the right who should read this @wdjstraw blog on tea party cuts v the coalition's http://t.co/SDN8IZR

  • http://twitter.com/rosiecosy/status/98422769498337280 Rosie

    There are people both on the left and the right who should read this @wdjstraw blog on tea party cuts v the coalition's http://t.co/SDN8IZR

  • http://twitter.com/rosiecosy/status/98423082968039427 Rosie

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/cTSyT3e

  • http://twitter.com/greenleftie/status/98423513483984896 Michael Bater

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/FJbdG2U

  • http://twitter.com/tom_earnshaw/status/98424352122486785 Tom Earnshaw

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/FJbdG2U

  • http://twitter.com/cahitali/status/98425811916431360 Cahit Ali

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/inbq157 < interesting analysis by @wdjstraw

  • http://twitter.com/mraxtl/status/98428062722555904 dm

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/Kk8K7Ea #ConDem #ukuncut

  • Joanna

    your analysis is simply wrong I’m afraid. the CBO analysis shows the US deficit set to narrow by 7.7% between 2011 and 2015, compared to a 6.4% reduction in the UK over the same period, and the 2012 reduction is 3.1% in the US compared to 1.7% in the US. Even the Obama budget had faster cuts than the UK over the next 4 years

  • http://twitter.com/unejh/status/98435835300544513 june hilton

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • Lisa Ansell

    How did Labour’s plans compare to the Teaparty?

  • Will Straw

    Joanna – Those figures include a contribution from growth. You need to look at the size of the discretionary fiscal consolidation (ie spending cuts and tax rises) to compare what’s happening in each country.

  • http://twitter.com/simon_watkins/status/98441120111017984 Simon Watkins

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/FJbdG2U

  • http://twitter.com/falseecon/status/98449799392661504 False Economy

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/johnedginton/status/98449976262266880 John Edginton

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/wjordan/status/98450051050905602 William Jordan

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/sweetgirlchild/status/98450198392602625 rachel johnson

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/gnomeicide/status/98450804452765696 Cab Davidson

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/beccabeitris/status/98451794136547329 Becca

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/spsot/status/98452128414175232 Spir.Sotiropoulou

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/kUCU2tp

  • http://twitter.com/girl_interrupt_/status/98454878543818752 Amanda Griffiths

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/bobthomson70/status/98454972437512192 bobthomson70

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/paul_trembath/status/98456678764261376 Paul Trembath

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/brianbannatyne/status/98458579878674432 Brian Bannatyne

    Forensic post by @wdjstraw on why the coalition's cuts are faster and deeper than the Tea Party's http://t.co/LQu2v5A

  • http://twitter.com/blanchardspov/status/98458768337158146 Simon Blanchard

    Will Straw > Coalition cuts are deeper and faster than Tea Party's http://t.co/KGW4Hun

  • http://twitter.com/hopbin/status/98459318550151168 James Maddison

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/jonathanpsadler/status/98462556934512640 Jonathan Sadler

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/bristolpaul/status/98486632155586560 Paul Smith Bristol

    Coalition cuts are deeper and faster than Tea Party’s l Left Foot Forward – http://j.mp/pLEPlg

  • http://www.nosacredcows.co.uk Toby Young

    Looks like you and Anthony Painter have misread the CBO tables. See here for a more accurate analysis:

    http://www.spectator.co.uk/coffeehouse/7139398/an-open-letter-to-will-straw-about-deficit-reduction.thtml

  • http://twitter.com/psbook/status/98499302195855360 Political Scrapbook

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/stevie_a_67/status/98499526788251648 Stevie Anderson

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/tattymoustache/status/98499529615212544 Jade Constable

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/cllrwalshaw/status/98499657478578177 Neil Walshaw

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/jonathannballs/status/98499774394810368 Jonathan Balls

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/aljch/status/98500120848498688 allan challenger

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/scott_redding/status/98501770019475457 Scott Redding

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/rykalski/status/98501970536562688 Wesley Rykalski

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/oasis_of_truth/status/98502028162113536 Oasis Caretaker

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/the_eco_thought/status/98502212115906561 Timothy Morton

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/gagging_order/status/98502516639141888 Gagging Order

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/jackfalkingham/status/98502926397480960 Jack Falkingham

    RT @psbook UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://t.co/oWwuV43

  • http://twitter.com/djwomble/status/98502928758874113 Stewart Lochhead

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/sooper8/status/98503626527485952 Sooper8

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/lucianaberger/status/98505509681893376 Luciana Berger

    RT @psbook: UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US(0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/johnnor/status/98506025325428736 John Nor

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/dev_reward/status/98506576251469824 Dev Reward

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/gemmatumelty/status/98508007620620290 Gemma Tumelty

    RT @psbook: UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US(0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/giurella/status/98509009040056320 peppe rella

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/oxygum/status/98509277844615169 simon trott

    RT @psbook UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • http://twitter.com/sarahluv81/status/98512516681973760 sarah

    UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://bit.ly/mXzGLi

  • Leon Wolfson

    If you pretend that these measures won’t wipe out, or at least drastically slow other cuts, sure. But pretending that is silly.

  • http://twitter.com/angusde/status/98516178447769600 angus murray

    “@psbook: UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://t.co/k1oAj41”

  • http://twitter.com/quigonsmith/status/98516190837743617 Mark

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/lighthearteddan/status/98534441240117248 Daniel Weichman

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/proactivelyposi/status/98567185768783872 Michael Ant

    Coalition cuts are deeper and faster than Tea Party's reports @wdjstraw http://bit.ly/piJX9b

  • http://twitter.com/lizmilton/status/98617809508118528 Elizabeth Milton

    Coalition cuts are deeper and faster than Tea Party's | Left Foot … http://bit.ly/ot7HHs

  • Mike Thomas

    So by your own (mistaken) calculations, the Darling deficit reduction plan was also more severe than the US Tea Party cuts?

    The parallels from the Great Depression are there, then they simply ran out of stimulus money and the economy still did not adequately recover. Now, the exact same has happened. Again, the same medicine will be applied.

    Also, you omit that the US economy’s PSND is now much higher than the UK’s which is a rather convenient method of avoiding altogether the motivations of Congress to stop the growth in government spending.

  • Billy Blofeld

    So what is the score Will? Are the Speccie right or wrong?

  • http://twitter.com/modditydodds/status/98689559554031616 Knut Cayce

    RT @leftfootfwd: Coalition cuts are deeper and faster than Tea Party's http://t.co/QFpsnfx

  • http://twitter.com/june4th/status/98718965257351168 Noxi

    RT @wdjstraw: @toadmeister You're wrong to say that UK cuts are smaller than Tea Party's. They are deeper and faster: http://bit.ly/piJX9b

  • http://www.tdsays.blogspot.com Tyler

    Sorry Will, but you are quite wrong here. Monst notably because you are comparing the UK deficit reduction plans to the ADDITIONAL US US deficit reduction plans forced upon the US by the debt cap.

    Obama’s deficit reduction plans were already faster than the UK coalitions….now they are even faster still. Fudging the data doesn’t really change that fact.

  • Leon Wolfson

    Again, what rot. This is going to replace vast swathes of the existing cuts, pretending otherwise, when that’s already what’s been stated is happening…

  • http://twitter.com/jamesrupa/status/99030294644011008 James Rupa

    Coalition cuts are deeper and faster than Tea Party’s http://t.co/rIpulp9

  • http://twitter.com/alexmckerrow/status/99066923295313921 Alexander James

    RT @psbook UK deficit reduction much harsher (3.8% of GDP) than Tea Party debt deal in US (0.7% of GDP) shows @wdjstraw http://t.co/oWwuV43

  • http://www.leftfootforward.org/2011/11/impact-of-arts-council-cuts/ Labour: Arts cuts have led to a “scaling back of ideas, innovation and creativity” | Left Foot Forward

    [...] also: • Coalition cuts are deeper and faster than Tea Party’s – Will Straw, August 2nd [...]