Isn’t this an interesting thought?

The claim that Corbyn threatens business is nonsense. He plans a government that will spend to invest. That is unambiguously good for business, and it pays for itself by delivering productivity growth, higher wages and so more taxes. Only a banker could fail to understand that.

Or anyone who notes that 300 years of government investment hasn’t managed to pay off the national debt……

” Just as current wealth inequality is unambiguously harmful,”

Proof please? Swedish wealth inequality is higher than our. Is that harmful?

16 comments on “Isn’t this an interesting thought?

  1. Even worse?

    “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.” – John McDonnell in one of the political interview programmes (not sure if this is actually verbatim, but it is quoted as such by a Labour bag-carrier so hopefully it’s close enough to be fair to the man.)

    Presumably this means all infrastructure, everywhere, is actually free, so long as construction companies pay corporation tax and workers pay income tax. So the whole country should be absolutely covered in infrastructure. Not sure what the official line is on whether any infrastructure can be malinvestment – lots of empty Spanish regional airports, as I recall, but at least they were free?

    (I think this might be the same basic “all the money comes round again” fallacy as the “Henry Ford made a profit because he paid workers enough that they bought his cars” argument – that line shows ignorance of efficiency wages, this “infrastructure pays for itself” one seems ignorant of opportunity costs, and aren’t they half of economics?)

  2. “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.”

    If they pay 100% tax, then they will be covered, yes. Government stimulated demand never ends well…

  3. TBF isn’t this what gurus such as Wrong-Lewis say? From Dillo’s blog

    impartial.

    * Update: Simon Wren-Lewis on Twitter corrects me here. At negative real interest rates, infrastructure spending pays for itself even if the multiplier is zero.

  4. “Every hole digging project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.”

    FIFY

  5. I wish someone would ask McDonnell what’s this difference between this investment and all the investment Brown did? Because nobody has shown a return to Brown’s investment and until they do I’ll treat these latest claims with the contempt they deserve.

    All we saw from Brown’s splurge was public sector wages rising faster than the private sector wages.

  6. @BIND, I think Brown’s splurge sort of worked. If you take the view that the money was borrowed so he could avoid cutting back on the ridiculous public sector staffing, and to throw at the economy (scrappage ?) it did it’s job.

    Lots of lefties tell me that “when the Tories took over the economy was growing”, which it will if you splurge £150bn a year on it, which is of course, the bit they don’t think about.

  7. The Brown splurge worked in so far as it avoided the small recession we’d otherwise have had in 2002/03. However since it made the situation post 2007/08 worse I wouldn’t really call that win.

  8. Doesn’t McDonnell’s statement then vindicate the US MNCs that invest so heavily in the UK, Ireland, Lux, Malta etc because their investment creates jobs that create income that is taxed etc etc etc

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