[lambda_garden]

An important factor is which country we are talking about. Only the US really has access to this "glitch" by being the world's reserve currency. UK austerity was so brutal because there's no real demand for GBP, outside of trading with the UK.

[ben_w]

I met someone in Berlin who told me that he was a member of the UK Conservative party, and that he was on-course to become a Conservative party councillor before also leaving the country. He made at least four testable false statements in that discussion (I made notes, one was for how long Cameron had been prime minister), so take this with a pinch of salt:

He openly admitted that the Conservative party manifesto of 2010 was a lie. That it was totally impossible to do what they promised about the deficit. Now, I'm not sure I remembered the manifesto pledge correctly, but even with that caveat, he still insisted that lying was absolutely acceptable. He refused to accept that normalising lies in this fashion is a problem (I wish I'd asked him about the Boy Who Cried Wolf, but I didn't) and then promptly changed the topic.

[waveofthehand]

This isn't true. The UK can spend as freely as the US. Being the reserve currency has nothing to do with it. Demand for the currency is unrelated to how much a sovereign state can spend.

[lambda_garden]

It is related to how much the country can spend through borrowing and printing. Very few counties spend less than they raise through taxation.

[BoxOfRain]

I think a lot of the problem with the UK is that the housing market eats the wind out of everything else's sails too. This has both the economic effect of reducing the amount people have to spend on non-housing things and also it creates the psychological malaise of 'why should I work harder just so I can pay off some random baby boomer's mortgage instead of my own?'.

If we can fix housing we can fix a lot of what's wrong the UK I think.