Hmm, right

Now, don’t get me wrong. I happen to agree that we do need more government spending. But let me be clear. This is not a matter that need be decided upon on the basis of whether or not there is sufficient tax to pay for it. The decision criteria is simply is there need, and are there unused resources that could meet that need? If the answer to both is yes then the spend is necessary and a responsible government should undertake it, knowing that the boost to the economy that will result will return the spend to the Treasury by way of additional tax yield in due course: that’s what the multiplier does.

Those unused resources being, at full employment as we are, what?

14 comments on “Hmm, right

  1. He’s not alone in his delusions. They are shared by many academic economists as well as Dillow and Coppola. They are all effing nuts

  2. Tim, you’re clearly unaware of the Magic Employee Tree, where workers can be created by the Courageous State?

    This Murphy blog is a criticism of the FT’s economic editor. Is this the start of a concerted Murphy pitch for that position?

  3. It’s easy – we import them from the rest of the world… We’ve got plenty of houses to put them in, loads of school spaces, hospitals that are pretty much empty, etc etc… oh wait…

  4. @ Tim
    Yes, there are *some* unused and quite a lot of under-used resources, but Murphy’s proposals are unlikely to make good use of them.
    #2 son, the one who read Psychology instead of Maths, informed me, having studied the problem, that only 10% of those with a diagnosis for Autism have got a job. [I reckon that those on the Autistic Spectrum most likely to get jobs as computer programmers, Actuaries, or Professors in *real* uniiversities are less likely to get diagnoses but even so, this is a wasted resource and I should vastly prefer a handful of autistic lads typing in data accurately than a gaggle of girls chatting instead of concentrating on getting it right.] If Murphy thinks that increasing government spending through bureaucracies is a solution to this problem, he is very stupid.

  5. More government. More regulation. More tax.

    A peerage, a job, a quango (or ten).

    Always the same with Ritchie.

  6. ‘The decision criteria is simply is there need, and are there unused resources that could meet that need? ’

    Isn’t that exactly what free market capitalism excels at doing, in fact its whole raison d’être, without Government involvement or taxation?

  7. Seem to recall when I did A level economics that the fundamental problem was more needs than resources so how to best allocate etc. so has Murphy solved that one now? Surely the Nobel is in the bag along with the peerage and cushy job

  8. If the boost to the economy from a budget deficit will pay for itself, then when has a cumulative budget deficit of £1.5 trillion failed to achieve this….?

  9. I have clashed heads with MMT’ers over full capacity economies and am still no further forward as to how their minds work.

    You CANNOT simulate demand and expect an increase in wealth. Splashing tax dollars on a factory to recruit every unemployed person will solve the issue of unemployment on paper, but will what they are producing be in demand? Probably not, otherwise the private sector would have sniffed it out already. What will result will be little more than a UBI scheme, which is worse as it prevents workers from seeking real value adding roles in the economy.

  10. If the boost to the economy from a budget deficit will pay for itself, then when has a cumulative budget deficit of £1.5 trillion failed to achieve this….?

    Because of evil neo-liberalism.

  11. From my experience in large multi-nationals about half of the staff are there to stop the other half getting anything done. He could turn his mighty mind to fixing that.

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