Monday, March 31, 2014

Peter Martin — The economics of a budget surplus: Something to think about before making rash promises

Left of centre political parties are nearly always faced with the charge, levelled by their right of centre opponents, of fiscal profligacy. Accusations are made that the more socially minded parties cannot be trusted with a nation’s finances. They will tend to spend too much ‘taxpayers’ money’ on what they consider to be worthy causes. This supposed tendency is often disingenuously linked to the size of the government budget deficit, which in turn is equally disingenuously linked to the size of government itself. Left unanswered this charge will cost votes. So how should they best respond to the very predictable attacks along these lines which will be only too familiar to Labour Party strategists?
MMT solution follows. Why "fiscal responsibility" is irresponsible.

1 comment:

Matt Franko said...

‘taxpayers’ money’

This is the true libertarian view in that govt "gets the money" from the individual taxpayers... govt doesnt have the authority to spend/issue currency, etc...

So its not going to be settled via a "left/right" argument along technocratic lines, accounting, etc... but rather by an "authoritarian/libertarian" argument...

Those who fancy themselves left-libertarians have some hard thinking/soul searching to do on this.