A deficit of economic reality

From: John Cole, Baildon.

ED Miliband has come in for a lot of stick from the media for “forgetting to mention the deficit” in his speech to the Labour conference. In this the media and coalition spokesmen would seem to be in collusion in getting two related messages across to the British public.

First: that the Government budget deficit is the most important economic issue facing the country. Secondly: that the only way to reduce the deficit is by extending the programme of austerity.

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Both of these propositions are twaddle and betray a profound ignorance of economic theory and practice.

To quote from a recent letter by Michael Meacher MP: “Alistair Darling’s two stimulatory budgets in 2009-10 brought the deficit down sharply from £157bn in 2009 to £118bn in 2011 – a reduction of nearly £40bn in just two years. Osborne’s austerity budgets have slowed the reduction to a trickle, down to £108bn now – a reduction of £10bn in three years.”