Monday, April 08, 2013

Britain's Lost Thatcher Boom

So Margaret Thatcher is now dead. I disagree with some of the things she said and did, but it can't be denied  that by slashing absurdely high marginal tax rates (top rate at 83% for labor income and 98(!)% for capital income), deregulating, bringing down inflation and reining in the, at the time, super crazy British unions, she helped revive the British economy.

Real GDP growth increased from an average of 1.9% in 1973-79 to 2.5% in 1979-90, and to 2.9% in 1990-2007 while most other Western countries saw unchanged growth at best.

After 2007, the British economy has as we all know weakened dramatically, with GDP in fact shrinking by 0.3% on average since then.

This is mostly because of how international problems, most notably the bursted U.S. housing bubble and the European debt crisis, have negatively affected Britain. But it also reflects how the Thatcher economic policy legacy has been partially squandered by a lot of re-regulations, and increases in tax rates, government spending and inflation.


Blogger Kapitalist said...

Funny video clip of a stupid Swedish reporter interviewing her:

3:04 PM  

Post a Comment

<< Home