So Reform proposes that:
Research for this paper indicates that the public sector workforce needs to reduce by at least one million people (15 per cent of the total) if the structural deficit is to be eliminated, over a period of years.
Hmm, we\’ve a large structural deficit, one which we need to deal with in some manner.
Ritchie then tells us that:
This is how ludicrous this proposal is.
But what is more ludicrous is the economics. 1 million unemployed means, when there is a lack of demand in the economy, which will spiral out of control with all these extra out of work, that all these people will remain unemployed – at cost to the benefit system.
That\’s not a defence of a structural deficit nor an attack on closing it over time.
That\’s a defence of a cyclical deficit.
If only Ritchie knew enough economics to recognise the difference…….