Summers, Osborne, and Zakaria on Austerity: Fact Check in One Chart

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Fareed Zakaria on Sunday presented an interview with British Chancellor of the Exchequer George Osborne on his CNN talk show GPS. (CNN did not post the video, but you can read the transcript here.) In the course of the interview, Zakaria brought up Larry Summers’s recent criticism of Britain’s austerity policy. The resulting exchange immediately set off my fact-check alert. Here is the relevant bit in full:

ZAKARIA: Let me ask you, to begin with, you’ve been touting Britain’s growth. You’ve written an op-ed in the Wall Street Journal. But, of course, there are a lot of people who say Britain’s recovery has been very weak, the weakest in the G7 other than Italy.

And there is a specific charge made which is that it was your austerity program, especially the spending cuts that was responsible for this very weak recovery.

Let me read to you something Larry Summers said on British television. He said Britain’s economic policies, meaning yours, “Are a powerful empirical test of the efficacy of determined, resolute austerity and the results so far have not been encouraging to advocates of that strategy. They are in line with predictions that this austerity would lead to reductions in demand, reductions in GDP,” et cetera.

What’s your response?

GEORGE OSBORNE, CHANCELLOR OF THE EXCHEQUER AND SECOND LORD OF THE TREASURY OF THE UNITED KINGDOM: Well, I totally reject his analysis. If you look at the situation the U.K. found itself in three-and-a-half years ago, we had had one of the deepest recessions of any of the major economies of the world.

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