Today, I reflect on the latest public finance data released by the British Office of National Statistics which shows the fiscal deficit is smaller than expected. Even progressive journalists have written this up as providing more scope for pre-election largesse to be provided. The fact that the fiscal balance is lower provides no more or no less scope for the government to net spend. The relevant questions that should be answered before such an assessment can be made are ignored by the journalists, including the fact that the unemployment rate is rising and the supply-driven inflation is falling fast.
William Mitchell — Modern Monetary Theory
Lower British fiscal deficit gives the central government no more or no less capacity to net spend to reduce unemploymentBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
2 comments:
“ The point is that one cannot really evaluate the ‘prospects’ or the desirability of a change in the fiscal strategy by just looking at the way the financial numbers are shifting.”
But then he says:
“ Not one mention that the output gap remains negative – meaning the British economy is producing some percentage points below what it can, which means unemployment is higher than it might be.
The lack of awareness of the output gap means there is not one mention of the spending-saving balance in the Non government sector.”
lol which one is it?
It's a technical way of advocating for a job guarantee?
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