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September 22, 2009



"Here’s a challenge for you: show me some time-series data in which we might be able to clearly identify when Thatcher became Prime Minister, and when she left."

The claimant count? It started rising from about 3.7% about six months after she took office, peaking at about 10.5% in late 1986, and then falling to a low of 5.3% (I'm reading these off a chart) about six months before she left office, when it then quickly shot back to nearly 10%.


All may be true and politicians are no doubt hubristic but if 1 is true it is because voters seek parties who match their preferences

Bruce Davis

A similar effect can be observed in the ups and downs of the Israeli-Palestinian 'peace' process. Generally, it is the hardliners who have the political capital to have 'talks' without being 'soft', while the doves end up sending in the tanks and planes (sweeping generalization but unfortunately close to the reality of politics in that part of the world).


Significant drivers of spending are exogenous; automatic stabilisers are one example, but another would be the bank crisis. Didn't matter who was in office or what they wanted - when the bed fell on them they had to do it if they wanted BACS to keep working. Quite a lot of infrastructure stuff is probably like this as well; if you need a new Thames barrier in year x, you need one (and you don't need it in year y), and it is surpassingly irrelevant which party is in charge.


Is it not because governments plan budgets and expenditure 2 years ahead, so an incoming leader will largely follow the existing budget of his predecessor, whilst planning to implement his own budget two years down the line? So governments do influence public spending, its just that there's a time-lag?

Also, is this the first time that a party will go into a UK election bragging about how savagely they will cut spending? They will win with a massive mandate to cut - has that ever happened before?

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