Andrew Mobbs (mobbsy) wrote,
Andrew Mobbs
mobbsy

Johann Hari wrote another anti-cuts article yesterday. I hate to admit it, but having read that, I'm finally beginning to have some sympathy with the phrase "deficit denier" (usually found in frothing comments posted to newspaper and BBC websites), in analogy with "climate change denier" being somebody who is ignoring an inconvenient truth in the hope that it will just go away if they pretend it isn't happening or doesn't matter.

He extensively relies on Keynesian economists like Paul Krugman, who are arguing that the UK¹ shouldn't cut spending now because that will depress the economy. Hari entirely ignores Krugman's statement "there's no question that Britain will eventually need to balance its books with spending cuts and tax increases.". Krugman isn't arguing against cuts, he's arguing against cuts as immediate and as deep as the coalition has implemented.

¹ (well, mostly the he argues about the US economy, but he occasionally mentions the UK)

Hari's argument that the national debt has been higher for 200 of the past 250 years is just silly. Even ignoring the obvious changes in technology that means it no longer takes months to get a message to Shanghai, or the economic reforms of Adam Smith throughout the 19th century it's still silly. He entirely ignores that for 155 of the past 250 years the debt has been cut; i.e. there hasn't been a deficit for most of the arbitrary period Hari is arguing about.

Even the coalition's cuts, which are both criticized and lauded for their severity, won't cut the debt for a while. The forecast is that the UK debt will continue to rise over the next 4 years. After years of these painful cuts, the result will be that the debt isn't going to get any worse.

Krugman might be right, I'm far from being qualified to judge which group of economists are correct, those advocating deep immediate cuts or those advocating delaying cuts and softer cuts. As far as I can see though, the common theme from the economists, also agreed by all major political parties in the UK, is that there have to be cuts.

It would have been nicer for everybody if the Keynesians were listened to and had turned out to be right. They weren't listened to though, so in a sense I hope that they're wrong and the cuts being implemented are necessary.
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