IMF: Apparently UK 'austerity' worked

There has been much to study and debate over the response governments have had to the "great recession" - and there undoubtedly will continue to be. But for Keynesians, an unexpected setback in the UK's growth and recovery (even if the austerity" wasn't quite so austere according to Reason). The IMF has since acknowledged its growth forecasts in response to 'austerity' were wrong (Telegraph):

Christine Lagarde has asked whether she needs to grovel on her knees before George Osborne over the IMF’s incorrect warnings on the UK economy, as she warned against raising taxes.

“Do I have to go on my knees?” Ms Lagarde, the head of the International Monetary Fund said, when asked whether she has apologised to George Osborne over the fund’s low growth forecasts and calls to adopt a ‘Plan B’ of less austerity – calls the body now accept it got wrong.

In a blow to Ed Miliband, who has called for higher rates of personal taxation and new levies on banks, Ms Lagarde said tax rises are “not recommendable”.

The growth the UK is enjoying now has “resulted” from George Osborne’s policies, she said. The growth now appears to be “pretty sustainable” because it is being driven by private sector investment as well as households consuming more.

A year ago Oliver Blanchard, the IMF’s chief economist, warned Mr Osborne was “playing with fire” with austerity and downgraded Britain’s growth forecast to just 0.7 per cent for 2013. Instead, it grew by 1.7 per cent, and is expected to hit 2.7 per cent this year.

While I think it's laudable that Lagarde has acknowledged the error, it's really the British who are benefiting substantially from the reduced debt burden that was advocated and the stronger economic growth. I can't help but wonder how much better the global economy would be without the seemingly neverending rounds of stimulus funded by debt that will one day need to be repaid.