the deficit! the deficit! but what about unemployment?

by Oisín Mac Giollamóir

Listening to the debate in the media today you would conclude that there is consensus amongst economists that the key problem of the UK economy is the deficit. And the key question is how to cut it. And the key election issue therefore should be how to cut spending. This is not the case.

Working backwards, perhaps the most ridiculous issue here is the notion that the only way of cutting the deficit is by cutting spending. Fraser Nelson of The Spectator goes so far as to say, “Cameron should ban the word ‘deficit’ and simply say ‘overspend’ instead.” It would seem that some right-wing commentators can’t add. A deficit arises when revenue is less than expenditure. An equally good way of cutting the deficit is by increasing revenue, i.e., by raising taxes. Saying the deficit is an ‘overspend’ is as idiotic as calling the deficit an ‘undertax’. Continue reading “the deficit! the deficit! but what about unemployment?”