UK's Responsible Economic Approach
WASHINGTON -- The chilliness is understandable. When David Cameron, Britain's new conservative prime minister, met with Barack Obama this week, the president was also encountering his worst political nightmare. If Cameron succeeds, he will do more than save his ancient island from the economic fate of Greece -- he will provide a model for Republican victory in the 2012 U.S. presidential election.
But Cameron's austerity has the virtue of economic responsibility. It is easy to close a budget deficit with massive new taxes -- but it is also massively destructive to economic growth. So Cameron has proposed about 4 pounds in spending reductions for every pound in tax increases. A recent study of 44 major fiscal adjustments in developed nations since 1975 found that a one-percentage-point increase in taxes as a portion of GDP cuts annual economic growth by an average of 0.9 percentage points. Reducing government expenditures by one percentage point, in contrast, increases average annual growth by 0.6 percentage points.
If Cameron's approach works -- dramatically cutting deficits without stalling economic growth -- it will be an obvious, powerful example for America and other nations.
But Cameron's progress offers two other lessons that some Republicans may be less willing to acknowledge. [...]
Read the whole thing. When I first read about Cameron's "Big Society", I was quite cynical about it. But now that I see more of what he's trying to achieve, it seems rather brilliant (given what he has to work with). And what it said about "Some type of center-right alliance of fiscally conservative Democrats and Republicans" ... well, read the whole thing. There may indeed, be some lessons there for Republicans.
The Republican's main strategy right now seems to be, that they aren't Obama and the Democrats. But that's not good enough. Remember in the 2004 elections, when the Democrats kept saying, "ANYONE but Bush", to justify their choice of John Kerry, and their anti-Republican platform? They were simply against the Republicans, more than they were for anything. That wasn't a good enough strategy then, and it's STILL not good enough for the Republican side to be using now. If winning matters. And it had better. If we continue losing, we may lose the farm.