the UK's experiment in reducing rather than raising government spending while Britain is still coming out of its serious recession is not only daring in the present economic climate, but it is also of great value in determining whether growing government spending is a valuable way to speed an economy out of a serious recession.

THE debate over the wisdom of further, putatively stimulating deficit spending versus greater budget discipline or fiscal "austerity" is confusing. It is so confusing in large part due to the unwarranted confidence of commentators on both sides of the issue. Equally plausible theories make contrary predictions, but no theory is all that plausible to start with. Our best models are either doubtfully applicable to our unique economic situation or are weakly validated empirically. In truth, nobody knows with much certainty whether a second stimulus would help or hurt. Nobody knows with much certainty whether fiscal retrenchment would help or hurt. That's why, as Gary Becker noted recently,

There is a great deal of deficit-hawkery emanating from newly-fortified Republicans. Of course, only a few congressional Republicans actually have the cojones to call for cuts where they really count, in entitlement and military spending. In any case, it is doubtful Senate Democrats and the president will approve significant reductions in spending. And that's why the contrast between American and British policy is so potentially illuminating. If Britain's dramatic cost-cutting produces a recovery no worse than America's, Republicans will have a powerful rhetorical weapon at their disposal. Like Mr Becker, I feel confident that

the British way is a far better way to improve the long-term growth prospects of an economy. That is, reductions in the bloated levels of government spending and fiscal deficits will do much more to stimulate the longer-term growth of the British economy, mainly by encouraging private investment and innovation, than will the present American approach.

The big question now is which path is best for restoring normal levels of growth and employment. If the superior long-run strategy performs as well in the short-run as the Obama administration's more classically Keynesian approach, Mitt Romney or whoever wins the GOP nod in 2012 will be able to make a plausible-sounding case that Mr Obama mismanaged the recovery and left Americans worse off than a Cameron-like conservative budget-cutter would have done. However, if Mr Cameron's downsizing causes Britain's recovery to stall relative to America's, Mr Obama will have a ready example of the folly of fiscal discipline during recovery and the dangers of conservative government.

I'll admit I'm rooting for the UK approach. It's what I'd bet on if forced to make a bet. But I wouldn't bet that much. However things turn out, folks on the wrong side of the bet will make a reasonable case that Britain and America are so different that few lessons can be drawn from the success or failure of Mr Cameron's approach. It's usually pretty easy to avoid admitting we were wrong. It would be nice, however, if we would let our opinions ride more on the way the world turns out, and kept our interpretation of the way the world has turned out from riding so much on our prior pet opinions. Reader, let's try.

(Photo credit: AFP)