The latest data from the UK provides us with further evidence that mainstream economic theory and its policy advice is dangerous and should be disregarded. We are now some six months or more into the period of fiscal austerity in Britain even though many of the cut backs and tax hikes etc have not yet been introduced. But the British households and firms have known since the election result in May what was ahead of them and so have had time to make adjustments to their spending and saving patterns to take into account the expected future. Modern Monetary Theory (MMT) predicted that as a result of the fiscal austerity plans, the British economy would slow down again as private consumers and firms cut back on their own spending driven strongly by the fear of unemployment and flat sales conditions that accompany that situation. Mainstream theory pushed the notion of Ricardian Equivalence which claims that that private spending is weak because we are scared of the future tax implications of the rising budget deficits. But, the overwhelming evidence shows that firms will not invest while consumption is weak and households will not spend because they scared of becoming unemployed and are trying to reduce their bloated debt levels. Recent data shows that the Ricardians in UK have had a wonderful Xmas. Not!