Archive for the Government Spending Category

CEO compensation and Jamaican demands for reparations: two sides of the same coin

David Cameron’s visit to Jamaica last week led to vociferous demands for the UK to pay the Caribbean island billions of pounds in reparations for slavery.  Most people here reacted with predictable eye-rolls and sighs.  Slavery was abolished throughout the British Empire in 1833, nearly two centuries

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How do you deal with someone who thinks the Earth is flat?

Imagine you are relaxing at a bar enjoying a drink after a hard day’s work.  The person next to you strikes up a conversation.  Initially he seems reasonable.  But soon he begins to go on at length about how the Earth is flat and how a misguided

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Whatever it is, Corbynomics is not mainstream

A group of economists hit the headlines last week with their claim that Jeremy Corbyn’s policies are supported by mainstream economics.  Perhaps the best known of them is David Blanchflower, a Monetary Policy Committee member when Gordon Brown was Chancellor.  He predicted before the 2010 General Election

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Keynesians are wrong: Cutting public spending can boost economic growth

The key aim of George Osborne’s economic policy has been to eliminate the financial deficit of the public sector.  The main way of trying to achieve has been to squeeze public spending.  The orthodox economic textbooks maintain that this withdraws demand from the economy, and so leads

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Scandinavia provides the evidence for Osborne’s war on welfare

George Osborne’s budget has been met with predictable outrage from the poverty lobby.  The cuts to the welfare budget will allegedly create shocking levels of deprivation.  Young people in particular, it is stated, have been singled out for punitive measures.  On the face of it, the arguments

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Supply side success is a cure for the drug of deficit finance

George Osborne’s plan to run financial surpluses and use them to pay off government debt has been met with the usual set of whinges and whines, mainly from academic economists funded by the taxpayer. Of course, their arguments are based purely on what they believe to be

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Bribing the electorate: new rules of the game thanks to zero inflation

The temptation to believe in the concept of a free lunch is one which has proved irresistible to numerous governments through the ages. Henry VIII, for example, has seized popular imagination once again through the brilliant portrayal of him by Damian Lewis in Wolf Hall. Bluff King

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Do short-term governments affect the UK’s productivity?

Since the economic crisis labour productivity growth in the UK has been very poor. The Bank of England estimate that output per hour (productivity) is 16% lower than it should be given pre recession trends. With output recovering and high levels of employment, many argue that the

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Do Budgets really matter?

All eyes will be on George Osborne’s Budget today. An immense amount of media attention and serious commentary will be devoted to it. But do Budgets really matter? How much difference would it make if successive chancellors simply did nothing, apart from indexing various allowances and benefits

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Does Miliband understand the importance of incentives?

Ed Miliband has long had a problem with voters not perceiving him as “normal”. His famous struggle with a bacon sandwich in some ways says it all. But at a much more important level, he seems to have little or no empathy with one of the most

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