Here are three intriguing insights from economic conservatives:
Positive economics is in principle independent of any particular ethical position or normative judgments. As Keynes says, it deals with "what is," not with "what ought to be." Its task is to provide a system of generalizations that can be used to make correct predictions about the consequences of any change in circumstances. Its performance is to be judged by the precision, scope, and conformity with experience of the predictions it yields.
Milton Friedman, The Methodology of Positive Economics [pdf] (1953)
We should cut early, as deep as is feasible given time-tabling constraints. We need growth, and early cuts are likely to promote growth, even in the short term. There are three reasons why. First, at lower levels of public spending the economy is likely to grow faster. If the economy grows faster, then wages will grow faster. So households today will feel safe to borrow and consume more and to save less, knowing that their (pre-tax) incomes will be higher later, allowing them to pay off their debts. Investors will also expect better returns if growth is faster...
Andrew Lilico, Chief Economist, Policy Exchange, The Observer, June 2010
[The Office for Budget Responsibility] expect GDP in Britain to grow this year by 0.9% – and by 0.7% next year...The OBR have significantly reduced their assumptions about the spare capacity in the economy – and the trend rate of growth. And this increases their estimate of the proportion of the deficit that is structural – in other words, the part of the deficit that doesn’t disappear even when the economy recovers. So our debt challenge is even greater than we thought because the boom was even bigger, the bust even deeper, and the effects will last even longer.
George Osborne, Chancellor of the Exchequer, Autumn Statement, November 2011
I trust that any followers of Milton Friedman will have the good grace to accept when an economic hypothesis has been disproven.
Further update: Andrew Lilico has explained why his theory hasn't yielded the expected results. It rather confirms IanC's intuition in his first comment below.