Britain’s phoney debate on slashing spending

In deciding what to do about the UK's general government deficit, we must recognise the uncertainties: we do not know how big the “structural” fiscal deficit is; we do not know how long correction can be delayed before investors lose confidence; and we do not know how far a fiscal tightening will weaken aggregate demand. But the costs of being too optimistic are likely to be higher than of being too pessimistic. That should determine how policymakers respond. Hosted on Acast. See acast.com/privacy for more information.