A Fine Economic Mess in the United Kingdom
New YorkerMAR 23 2023
Liz Truss's economic plan makes complete sense. The PM — who is in a race against time; facing the prospect of an election in two years and an impending recession — has finally reprioritized boosting growth and shrinking the state. While lower taxes and allowing the Bank of England to tackle inflation by raising interest rates may be painful at first, it's the right thing to do in the long term.
Studies have shown that tax cuts don't fuel growth. The UK already has the lowest corporate tax rate in the G7 and one of the softest regulatory regimes along with it. "Trickle-down" economics is a failed policy, and further tax cuts under these circumstances make no sense whatsoever.