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The economics behind Zack Polanski's claims (www.newstatesman.com)
submitted 10 months ago by to c/uk_politics@feddit.uk
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Although Campbell is right to point out that markets do play a significant role in government spending, Polanski is on to something deeper that could help reframe the debate around the UK economy. While Rachel Reeves might be celebrated for scrapping the two-child benefit cap, the latest budget doesn’t go nearly far enough in delivering the change that Britain desperately needs. Austerity has scarred the UK for the last 14 years. If it wants to finally break free, then it’s time for a radical new approach. And that starts with rethinking how government finances work.

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[–] 2 points 10 months ago (4 children)

An interesting article. I hadn't heard of MMT before this. Well... at least not stated in such a way.

Spend too little while resources sit idle (unemployed workers, empty factories) and you condemn the economy to stagnation.

So is this suggesting that we should rapidly ramp up spending? And that will bring the unemployed back to work? I think that's rather simplistic, no? People are unemployed for a multitude of reasons, not simply that there isn't enough work to go around.

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  • [–] 2 points 10 months ago (1 child)

    It's worth noting that MMT is highly contested. I don't know enough to know who's right, but I'm aware of the argument.

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  • [–] 1 point 10 months ago

    I would have thought people who were proponents of the original formulation that said inflation is not affected by government spending - because of globalisation and China - would have egg on their face after we had >10% inflation immediately after all the covid spending.

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