Here's the back story. Wasting no time, the new coalition U.K. government led by Prime Minister David Cameron, made a dramatic package of government spending cuts its first order of business. Many U.S. conservatives have looked with great longing at the austerity surge. The numbers are staggering -- an average 19 percent cut for all government departments, resulting in half a million public sector layoffs.

And look! Just as the Keynesians predicted, the economy immediately slumped, apparently proving that the last thing a government should do in a weak economic climate is suddenly kick the legs out of the demand side of the economy. It could happen here, Obama should argue! It's still too soon, and the U.S. economy is too fragile, to make austerity the watchword of the day.

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After the recent national election, Labour holds 258 seats, the Tories have 306, and the Lib Dems hold 57 seats. A Tory/LibDem coalition could form a majority government, but Labour and the LibDems would've needed local nationalist and socialist parties to join a coalition.

The Lib Dems may not form a full-blown coalition with the Tories. Another strong possibility is something called "confidence and supply," which forms a minority government that isn't in constant danger of a vote of no confidence dissolving the government.

You can follow BBC news live here.

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Brown's move looks like an attempt to stop the Liberal Democrats from forming a coalition government with the Conservatives, who won the most seats in last Thursday's national elections, but who didn't win enough to form a government. No one's sure how well the Lib Dem/Tory negotiations are going; some Tories say they're going well, but Tory right-winger Iain Duncan-Smith said today that the Tories are uninterested in electoral reform, a Lib Dem priority that would end "first-past-the-post" elections and help third parties pick up more seats in Parliament.

According to the Guardian:

Brown is proposing a "progressive" government, comprising Labour, the Lib Dems, and presumably the SNP, Plaid Cymru, the SDLP and the Alliance. Electoral reform would be a priority.

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Yesterday, as British voters were heading to the polls, he wrote a wonderful column for the Washington Post. The column is a love letter to the legendary Independent Voter. Penn's entire argument is predicated on the success of Britain's Nick Clegg, the leader of the Liberal-Democrat party. Penn says the inevitable, stunning success of that third party will definitively prove that Mark Penn is always, always right when he says that America is full of independents who think about things the same way that Mark Penn does:

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In some ways, yesterday's results were more ordinary than anyone expected from what was a genuinely unusual campaign: the unpopular incumbent Labour Party took a hit, though not as bad as expected. Labour's been cut down to 29 percent of the vote, which won the party 253 seats, so far, out of the 650-member House of Commons. (The counting isn't all the way done yet.)

The once-hated Conservatives (also known as the Tories), after spending 13 years out of power trying to reinvent themselves, managed to retake a narrow plurality. They've won 36 percent of the vote, and 298 seats.

And the Liberal Democrats, long stuck in a distant third place, stayed there. Voter disgust with both major parties failed to materialize into the expected surge for the center-left third party, which got 23 percent of the vote. Breaking all expectations, the Lib Dems actually suffered a net loss of six seats in Parliament (again, according to the count so far), bringing them down to 53 in total.

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What’s going on here?

Immigration politics are a little different, country to country, but not that different. Here's how it breaks down in the U.K.: The Conservatives are fairly akin to America's Republican Party, as the least bashful representatives of British nationalism on the scene. Meanwhile, Britain's two left-of-center parties align with the two faces of our Democrats.

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Brown made the first major flub of the country's short campaign season Wednesday, caught on an open microphone calling a 65-year-old voter a "bigoted woman" after she pressed him on immigration during a public meeting.

The British leader, said to have a sharp temper, raged at an aide after mixing with voters in northern England -- but failed to notice he was still wearing a TV microphone, or that it was recording.

It's the latest in a long line of missteps by lawmakers whose private remarks have been made accidentally public -- from President Ronald Reagan's 1984 joke declaration of war on Russia to President George W. Bush's overly familiar "Yo, Blair" greeting in 2006 for Brown's predecessor, Tony Blair.

And Brown isn't the first British leader caught off-guard -- in 1993, then-Prime Minister John Major was recorded calling rebellious members of his Cabinet "bastards."

But the political consequences of his blunder could be severe, with Brown already third in opinion polls for Britain's May 6 election and desperate to show his supposedly statesmanlike credentials to dispatch less experienced rivals, Conservative leader David Cameron and Nick Clegg of the Liberal Democrats.

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Germany also said it would ask for detailed information about the case.

Both governments had to bail out banks that lost hundreds of millions of dollars on investments marketed by Goldman, according to the fraud suit brought by the U.S. Securities and Exchange Commission, in Britain's case Royal Bank of Scotland through its acquisition of parts of ABN Amro.

The SEC said the Royal Bank of Scotland paid Goldman $841 million to unwind ABN Amro transactions. Royal Bank of Scotland is now 84 percent owned by British taxpayers after being partly nationalized by the government.

Germany's IKB Deutsche Industriebank AG, an early victim of the credit crunch, lost nearly all its $150 million investment, the SEC said.

Brown on Sunday called for a full inquiry by Britain's Financial Services Authority in conjunction with the SEC. Britain would join Germany, where government officials said they would seek information about the bank's activities.

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Barely an hour after the announcement Tuesday that Woods will make his return at Augusta National next month, the British bookmaker William Hill installed him the 4-1 favorite. Phil Mickelson is second at 6-1, followed by Padraig Harrington at 16-1.

Hill also lists Woods as 1-20 to make the cut at the Masters. He is 25-1 to win all four majors this year.

"All the major courses are Tiger's favorites, so despite a terrible beginning we think that 2010 will end up being terrific for Tiger," William Hill spokesman Rupert Adams said in a statement.

Woods has not played competitively since crashing his car into a tree outside his Florida home, setting off revelations he had been cheating on his wife.

"We're pleased to hear that Tiger is to return to golf," Royal & Ancient Golf Club spokesman Malcolm Booth said. "Golf needs the world No. 1 to be playing."

The Royal & Ancient, golf's governing body sport outside the United States, hopes Woods will play at the British Open in July.

Woods has not yet entered to play at the British Open at St. Andrews, but has until May 27 to send his entry form. Booth said it's "normal" that he hasn't entered yet.

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The board of Cadbury PLC, maker of Creme Eggs and Dentyne gum, gave up a four-month fight to remain independent and on Tuesday recommended shareholders take Kraft's offer of 840 pence ($13.78) per share, amounting to 11.9 billion pounds.

Cadbury shareholders would also get a 10 pence dividend previously promised by Cadbury.

The revised bid is for 500 pence cash and 0.1874 new Kraft shares for each Cadbury share, still somewhat less than some analysts believed the company is worth but 50 percent higher than Cadbury's market value before Kraft went public with its approach in September.

A previous offer of 10.5 billion pounds ($17.1 billion) valued Cadbury at about 770 pence, but was dismissed by Cadbury as "derisory."

Kraft Foods Inc., maker of Toblerone chocoloate, Velveeta processed cheese and Oreo cookies, still has to persuade a majority of Cadbury shareholders to accept the deal, and the door remains open until 7 a.m. (0200 GMT) Monday for The Hershey Co. to jump in with a rival bid.

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Computer consultant Peter Moore, who was handed over to Iraqi authorities Wednesday morning, is believed to be the only survivor of a group of five Britons abducted in a daring raid outside Iraq's Finance Ministry in May 2007. Moore was taken along with his four British bodyguards.

Foreign Secretary David Miliband said Moore, 36, was in good health at the British Embassy in Baghdad.

"I have just had a very moving conversation with Peter himself," Miliband said. He said Moore was "in a remarkable frame of mind" given his ordeal.

"He is obviously, to put it mildly, absolutely delighted at his release."

Miliband said Moore would soon return home to Britain. He said Britain had not made concessions to the hostage-takers, but would not say whether a deal had been done between the Iraqi government and the kidnappers. He said Moore's release was the result of the reconciliation process between Iraq's government and armed groups willing to renounce violence.

"It is the result of some very hard work on the part of the Iraqi authorities," Miliband said.

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He didn't sound happy about it.

American intelligence has reportedly known about the facility for some time; the decision to reveal it came because, the New York Times says, "Iran discovered, in recent weeks, that Western intelligence agencies had breached the secrecy surrounding the complex." The country has since officially acknowledged the existence of the plant.

From Obama's statement:

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Because I am American, and those endless days and nights were spent in a maternity hospital in London, the week that followed has been very much on my mind as I listen to the recent attacks on the British National Health Service. It is a system that I found to be very different from the one currently being described as "evil" and "Orwellian" by politicians and commentators eager to use it as an example of the dark side of public medicine.

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Yet by the standards of the present moment, as these same conservatives mobilize against health care reform to “stop socialism,” that same great man was actually a raving Bolshevik. For among his most enduring legacies was the founding and sustenance of the system that became the National Health Service. Arguably as much as any other British politician, it was Churchill who established “socialized medicine.”

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In fact, it's lately been one of the GOP's favorite touchstones in the healthcare debate. Republicans love to talk about lines for care in the U.K.’s stolid socialized system: Go on the government’s dime for medicine, and you’ll die waiting for that easy surgery!

Seeking to play up this groundbreaking “Be frightened of England” angle, the Republican National Committee ran a web ad warning, "In Great Britain, individuals lose their right to make their own health care choices.” The Club for Growth, a conservative group, has a spot claiming that British bureaucrats pegged the value of six months of life at $22,750. “Under their socialized system, if your treatment costs more, you're out of luck,” the ad's narrator says as the spot cuts back and forth from weeping elderly people to Big Ben and the British flag.

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