Bill Mitchell — Corbyn should stop saying he will eliminate the deficit

The New Labour group are clearly getting desperate in Britain and Blair himself has come out again to vilify Jeremy Corbyn and predict a Labour annihilation at the next general election. Clearly Blair and his cronies haven’t understood that their time in the sun is over. They recreated the Labour Party into a Tory mirror image on key issues and the grass roots of the Party is now reclaiming the lost ground. The UK Guardian article (August 12, 2015) – Syriza’s Greece: the canary in the cage for Corbyn’s Britain? – illustrates how stuck in the neo-liberal mud the British economic debate has become. It tries to claim that Corbyn is a throwback to the past and the policies that old Labour tried in the 1970s failed and would fail again. Clearly, the writer and most of the commentators which resonate the same message haven’t really understood the difference between a currency-issuing government and one bound by a mania for fixed exchange rates and fiscal surpluses. Increasingly, the attempts by Corbyn’s support base to appear to be ‘fiscally responsible’ tells me that he will not succeed in altering the debate if he continues to promote ideas that equate fiscal responsibility with deficit elimination. Fiscal responsibility is equated with achieving full employment with price stability – and in the current climate that would require a fiscal deficit some percent of GDP larger than what it is at present. Corbyn’s camp should be talking about that rather than deficit elimination, which is a ridiculous policy target to aspire to.

In 2002, at a dinner in Hampshire, Margaret Thatcher replied to a question about her greatest achievement. She said:

Tony Blair and New Labour. We forced our opponents to change their minds.
That about sums it up when we read statements from the modern Blairites that electing Jeremy Corbyn would be the best thing for the Tories.

My view, from afar, is that the Tories would be terrified of a modern left leader and a progressive labour policy platform. That is, as long as the change translates into a re-framing of the debate and challenges the basic macroeconomic myths that go through to the keeper too often these days without scrutiny.

That was one of the legacies of Blair. New Labour propagated the neo-liberal economic myths too and gave the Tory narrative credibility when it had (and has) none.…

Between Margaret Thatcher and Tony Blair, the UK is flushed down the tubes.

Bill Mitchell – billy blog
Corbyn should stop saying he will eliminate the deficit
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia