The British Experiment

Wilkinson studies the politics of its outcome:

[I]f Mr Cameron's downsizing causes Britain's recovery to stall relative to America's, Mr Obama will have a ready example of the folly of fiscal discipline during recovery and the dangers of conservative government. I'll admit I'm rooting for the UK approach. It's what I'd bet on if forced to make a bet. But I wouldn't bet that much. However things turn out, folks on the wrong side of the bet will make a reasonable case that Britain and America are so different that few lessons can be drawn from the success or failure of Mr Cameron's approach. 

I sense a nervousness among Britain's Tories that they may have bitten off too much too soon.

Like Will, I have no idea which model will work best, but a country with a reserve currency has far more room for maneuver than an island economy that could be pummeled by the markets if it gets behind the debt cycle. Ireland is not a terribly encouraging example up till now of austerity leading to growth.

What does seem increasingly attractive is short-term ease and long term fiscal rigor. And that's what Obama's stimulus and the Simpson-Bowles report offer the US. Another reason for Obama to embrace Simpson-Bowles as the defining cause of his next two years.

(Photo: Graffiti is pictured on a pillar outside of the damaged 30 Millbank, a building housing the headquarters of the British Conservative Party, in London, on November 11, 2010. British Prime Minister David Cameron condemned as 'completely unacceptable' Thursday the actions of students who stormed his party's London headquarters in protest over plans to increase tuition fees. Fourteen people were injured and about 35 arrested after thousands of demonstrators besieged the 1960s office building near parliament, smashing their way through the glass frontage and wrecking the lobby. By Carl Court/AFP/Getty Images)