On the economy, James Blitz says “the UK and US have taken sharply different approaches, with Britain opting for fiscal austerity and the US for stimulus.” Bagehot downplays the difference:
On the economic front, the apparent ideological gap between British austerity and American stimulus is more rhetorical than real. Though George Osborne, the chancellor of the exchequer, talks loudly of spending cuts and pain, he is still running a roughly 8% budget deficit: a hefty stimulus even if he would never call it that. America’s zest for spending can also be exaggerated, senior figures add. An American vote to extend unemployment benefits was described as a fiscal stimulus. Britain was never going to slash jobless benefits, austerity or no.
And there’s also a crucial difference: the US has a reserve currency and so is much more immune to the speculation of currency traders. The UK is much more vulnerable to a run on its currency and higher interest rates, which would make debt even harder to pay off, and so has a premium on insisting on clear and unshakable austerity.
The Dish 