Can 77 of the world's leading economists be wrong?

[Gromit]

// 77 leading economists from around the world backed Gordon Brown over David Cameron in the election’s key economic argument.

Writing to The Times, the economists argue that Tory plans to axe £6 billion of government spending this year would cost jobs, risk tipping the economy back into recession and imperil efforts to cut the deficit. //

http://www.timesonlin...cs/article7098260.ece

[Oneeyedvic]

Do you believe the economists who deal with theory, or do you believe the business leaders who deal with reality.

BTW - who is most likely to lose out if there is a double dip. Not (in my opinion) people with university careers who will remain unaffected but those who lead business - ie the leaders.

Still, your choice who you believe.

[factor-fiction]

if it was THE 77 leading economists I'd take more notice of it. I'm sure the Tories could find 78 leading economists who take a different view

[jake-the-peg]

You don't need to be a leading economist to see that they are right.

Government spends money on projects that are peoples jobs - cutting tose projects is cutting those jobs.

Private industry - are involved in Government contracts everything from building contractors to recruitment companies.

Massive cuts in government spending will cause lay offs here too.

Then you've got the wider economy who sell to the people who will be laid off

That's before you look at the cost of putting them on the dole and lost tax revenue from them.

This is or should be basic and obvious to anybody who looks at it

So it's obvious to the Tories too.

They have clearly made the decision that it's worth returning to recession to pay off the city early.

The question is - do you agree with them?

[factor-fiction]

The Keynesian argument has a lot of merits but if you extend jake-the-pegs view why not just throw even more money at the public sector. There are several reasons. One is that we cannot afford to keep paying interest on such a massive debt. Also the public sector can be inefficient and much of the money can just go on pay rises, pensions, non-jobs, waste and civil servants' expenses.
By taxing the private sector to pay for public spending private firms can less afford to recruit staff and invest.
Also public sector spending , once boosted, beomes difficult to claw back and becomes a drain later on.
All parties and economists agree that a balance is needed at the moment - there are just small differences in what peopel think the right level of public spending should be right now.

[jake-the-peg]

IF you extend the argument

Come on Factor30 ridiculing someone's argument by exagerating it is silly you're better than that

I could say - If we extend the Tory argument on crime we would imprison 7 year olds that shop lift and drivers doing 33mph.

There's a simple question here

Is paying off the debt early worth returning to recession for?

I'd be interested to hear your view - I can see how some people might say yes - and it is an arguable case.

But I disagree

[factor-fiction]

When did I stop beating my wife?
I don't agree that "paying off the debt early" would mean "returning to recession". But if it did it might be worth the short term pain for long term gain.
Anyway I disagree that exaggerating the argument is silly. I'm simply saying that there is a range of options from slashing expenditure to increasing. If you say we should not cut it then i say how do you know that gives the best solution - why not go further and increase it.
Both parties say they want to cut the deficit. The only real issue between them is how quickly.
Anyway even with my economics background I know I'm not definitely right. As someone once said, put 2 economists in a room and you'll get 3 different opinions.

[Old_Geezer]

Any number of any type of person can be wrong.

This sort of thing is always a balancing act. To get an economy out of recession someone has to spend, and the one contender able to do so without worrying that their company will fold, is the government. On the other hand they have to live in the "real world", and there are consequences to upsetting powerful commercial financial institutions, by acting in a manner they disapprove of.

One should pay back deficits when times are good, and save for future 'rainy days'. But how far one goes depends on the nerve and beliefs of those in power.

[factor-fiction]

I think we are pretty much in agreement old_geezer. Should we write a letter to TheTimes?
I'm happy to have had the debate jake-the-peg. We'll never know who was right. We'll see what the electorate thinks.
I'm now working in the public sector so I can see both sides of the argument.

[VHG]

> 77 leading economists from around the world backed Gordon Brown over David Cameron in the election’s key economic argument.

Maybe they do (maybe they dont), but if we had not had Gordon Brown in charge for the last few years we would probably not be in such a big mess.

Which is a good enough reason for getting rid of him.

[rov1200]

This £6bn talk is just a smokescreen. Just factor in the £170bn debt outstanding. If the Tories want to add to this by cutting Labours NI increase would anyone notice if the debt went up to £176bn