Paul Krugman attacks Britain's austerity drive as 'deeply destructive'

Nobel prize-winning economist Paul Krugman has attacked the government's austerity policy as "deeply destructive". Speaking on Radio 4's Today programme , he said the coalition's plan was "failing dismally". Instead of cutting spending the government should be increasing it by 2% of GDP, he added. "It is deeply destructive to pursue austerity in a depression," said Krugman. "Give me a stronger economy and I'll turn into a fiscal hawk. But not now." The American economist gave a lecture at the London School of Economics on Tuesday titled Austerity thy Name is Vanity. He argued that David Cameron's government had made a terrible mistake by going for austerity, and could not change course now because to do so would be to admit its mistake. On his New York Times blog , he cites Martin Wolf of the Financial Times: "It may be humiliating for the government to offer such a speech now. But there is no reason why the people of the UK should suffer for its mistake, indefinitely." Krugman adds: "But there is a reason, of course: the ambition and vanity of politicians. Hello, Mr Clegg." He said the UK had now entered a depression with almost 30% of unemployed people having been out of work for 52 weeks or more, compared with 9.5% in 2008. On Europe, Krugman advised the Irish to vote against the fiscal compact, which will involve tighter, EU-imposed budget controls, in a referendum on Thursday. "European currency union was a mistake since the day the Maastricht treaty was signed," he said.