It’s amazing how quickly history repeats itself in the realm of economics. In the immediate aftermath of the 2008 financial crisis, in both London and Washington, there was a clear political consensus in favour of stimulus policies aimed at rescuing the global economy from collapse. But that consensus disintegrated quickly.
After a period of sustained stimulus spending under Gordon Brown, Britain embraced austerity in 2010, with the election of the Cameron / Clegg coalition government. The US followed suit three years later, in 2013, when Barack Obama – whose initial fiscal response to the Great Recession was already weak – signed off on $1.2 trillion worth of cuts as part of a bipartisan budget deal with the Republicans.