Michael Meachers letter (30 September) spells out what is wrong with our economic policies and why they cannot work. Why are politicians of all parties resistant to facts preferring their belief in the false neoliberal doctrines? Back in 2010, Professor Victoria Chick and Ann Pettifor demonstrated from a century of economic data that cutting spending increases rather than cuts the level of public debt as a share of GDP. As public expenditure increases, public debt falls and vice-versa. A nation is not a household, as Mrs Thatcher believed. The information is still available in The Economic Consequences of Mr Osborne, on the Policy Research in Macroeconomics website. I recommend it to our policymakers.
Michael Meacher was correct in pointing out that during a recession tax revenues fall, thus increasing the deficit. It does not end there. In 1966, as a first-year student, I was taught by Maurice Peston (Roberts dad) two of the basic tenets of Keynesian economics: that during a recession governments should spend more in order to increase aggregate demand; and that this is reinforced by increasing the incomes of the less well-off because they spend a bigger proportion than the better-off of what they earn. George Osborne should think twice before claiming As every first-year knows …
Professor Graham Hall
Link to article: feeds.theguardian.com/c/34708/f/663908/s/3efd0fd5/sc/7/l/0L0Stheguardian0N0Cpolitics0C20A140Csep0C30A0Cdismal0Etruths0Euk0Eeconomic0Epolicy/story01.htm