Leading economists attack budget surplus plans

Posted at June 13, 2015 | Categories : News

Leading economists have attacked George Osborne’s plans to entrench a permanent budget surplus in the UK.

In a letter to The Guardian, 79 economists have condemned the Chancellor’s plans to legislate for a permanent budget surplus, with prominent signatories including Dr Ha-Joon Chang, Thomas Piketty, Dr David Blanchflower, Prof Mariana Mazzucato and Prof Simon Wren-Lewis.

The letter argues that: “Osborne’s proposals are not fit for the complexity of a modern 21st century economy, and as such, they risk a liquidity crisis that could also trigger banking problems, a fall in GDP, a crash, or all three.”

And that:

“These plans tie the government’s hands, meaning it won’t be able to respond appropriately to constantly evolving economic circumstances, good or bad. The plan actually takes away one of the central purposes of modern government: to deliver a stable economy in which all can prosper. It is irresponsible for the chancellor to take such risky experiments with the economy to score political points. This policy requires an urgent rethink.”