Did Brexit kill British austerity?

6 July, 2016 at 16:40 | Posted in Economics | Leave a comment

This is the end of the disastrous experiment that was austerity, which was an ignominious failure that I opposed from the outset …

It is clear that the rising number of immigrants has put pressure on public services but this was mostly because Osborne under-invested in services in order to shrink the state. They paid their taxes, but Slasher didn’t invest that money in new schools, houses and hospitals …

When a negative shock comes John Maynard Keynes taught us that fiscal and monetary policy has to work together to provide stimulus. That worked incredibly successfully in 2009 as governments threw the economic kitchen sink at the recession. Growth spurted only to be slowed by austerity in 2010. The same is needed this time. All hands to the pumps. Austerity is dead. At last.

David Blanchflower

 

I hope Blanchflower is right. But — remembering what Keynes taught us — I still have my doubts …

a9476b77c570378950f812fa8d754423The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.

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