In 2010, the newly elected Conservative-Liberal Democrat coalition government announced it would eliminate the UK's structural deficit through cuts to public spending. To justify this politically painful decision, ministers repeatedly cited a paper by two Harvard economists, Carmen Reinhart and Kenneth Rogoff, titled Growth in a Time of Debt (2010).
The paper's central claim was striking and convenient: countries with public debt above 90% of GDP experienced average GDP growth of -0.1%. Not slow growth — negative growth. Cross the 90% threshold, Reinhart and Rogoff argued, and your economy doesn't just stall. It shrinks.
George Osborne cited the paper. David Cameron cited the paper. Across the Atlantic, Paul Ryan's deficit reduction proposals cited the paper. It became the intellectual foundation of austerity politics on both sides of the ocean.
In 2013, a 28-year-old graduate student at the University of Massachusetts Amherst asked Reinhart and Rogoff for their original spreadsheet. They sent it. He opened it in Excel. He found the error within days.
The spreadsheet error
Thomas Herndon, working with economists Michael Ash and Robert Pollin, found that Reinhart and Rogoff had made a basic Excel error: they had excluded rows 30 to 44 of their spreadsheet when calculating the average growth rate for high-debt countries. The excluded rows contained data for Australia, Austria, Belgium, Canada, and Denmark — all countries with debt above 90% of GDP that had experienced positive growth.
When the error was corrected and the full dataset included, the average GDP growth rate for high-debt countries was not -0.1%. It was 2.2%.
The cliff-edge that had justified cutting welfare, closing libraries, reducing NHS funding, eliminating legal aid, cutting housing benefit, freezing public sector pay, and reducing disability support did not exist in the data. It was an artefact of a mistake in a spreadsheet.
What the cuts actually did
The austerity programme implemented between 2010 and 2019 involved:
- Local council funding reduced by 40–60% in real terms
- Legal aid severely restricted, effectively removing access to justice for people who could not afford lawyers
- Housing benefit capped, contributing to increases in homelessness
- Disability benefits restructured through a Work Capability Assessment process widely found to be inaccurate and cruel
- NHS capital investment frozen while demand increased
- Public health budgets cut by 25% in real terms
The health consequences were documented. Research published in the British Medical Journal in 2017 attributed an estimated 120,000 excess deaths to health and social care spending cuts between 2010 and 2014. A subsequent study published in the BMJ in 2019 found the austerity programme was associated with 130,000 preventable deaths.
These are not projections. They are statistical analyses of actual mortality data, controlling for other factors.
The alternative that was available
The government's case for austerity rested on presenting the cuts as economically necessary — not ideological choices but mathematical imperatives. If the 90% debt threshold was real, then cutting was unavoidable.
But the 90% threshold was not real, and the IMF (which initially supported austerity) subsequently recanted. Research by IMF economists published in 2013 found that the fund had significantly underestimated the negative effects of fiscal consolidation on growth — what economists call the "fiscal multiplier". In plain language: cuts to government spending harm the economy more than was assumed.
The alternative — stimulus rather than austerity, using the historically low interest rates of 2010 to invest in infrastructure and public services — was what most mainstream economists now agree was the correct response. It was the approach taken by the United States under Obama's stimulus package, and the US recovered from the financial crisis faster than the UK.
The difference was not economics. It was politics. Austerity was a choice.
The human arithmetic
The political cost of austerity has been widely discussed: the erosion of public services, the collapse in trust in mainstream politics, the rise of populism, the conditions that fed Brexit. Less discussed is the arithmetic of the people who died.
130,000 excess deaths is not an abstraction. It is 130,000 individuals — people who did not receive adequate care, people whose disabilities were assessed as not disabling enough for support, people whose mental health deteriorated without services, people who died in homes they could no longer heat because their benefits had been cut.
The government that implemented these cuts cited a spreadsheet. The spreadsheet was wrong.
Sources
- Reinhart and Rogoff — Growth in a Time of Debt (American Economic Review, 2010)
- Herndon, Ash, Pollin — Does High Public Debt Consistently Stifle Economic Growth? (PERI, 2013)
- BMJ — Effects of health and social care spending constraints on mortality in England (2019)
- IMF — World Economic Outlook, October 2012 (fiscal multiplier revision)