Probably because the experience of being critiqued by either is akin to being savaged by a dead sheep.
I normally ignore Tim Worstall. So does almost everyone on the left, and for good reason: he’s a troll cheerleader saying little of worth, offering abuse by the bucket load and encouraging all the worst traits of internet rage and hatred that now so disfigure the right’s contribution to political debate.
Worstall ignores all this because unlike me he learned economics, but has clearly never thought about it. And the conventional economics to which he subscribes simply does not address these issues. So he comes to the wrong answer, as ever.
That\’s a real zinger isn\’t it? That as I\’m someone commenting upon economics who has actually learnt some economics I must be wrong.
So let me come to the third argument that he makes, which is that closing the tax gap won’t in any case end austerity. His logic is that all tax paid increases austerity and therefore closing the tax gap would reduce growth.
This is deliberate misinformation by Worstall for a number of reasons. First, we’re not talking about extra taxes here. We’re talking about collecting taxes owing. That’s something very different.
Second, I’ve never suggested we collect these taxes to pay down debt. I’ve suggested we collect them to spend – as a stimulus for growth. Worstall’s claim is only right if the money is withdrawn from the economy, but I don’t suggest that. I suggest it be used to invest in the economy – and that stimulates growth by more than is spent. In that case Worstall’s either not telling the truth (which is likely) or does not understand economics (certain).
At which point understanding economics becomes rather necessary.
Fiscal stimulus is provided by the difference between what the government spends and what it collects in taxes: as is fiscal austerity of course. It is the gap rather than the amount that matters. This isn\’t baby eating neoliberalism, this is straight Keynes.
So, what Murph suggests is that we\’ll take some unpaid tax, money which is currently circulating in the economy and being stimulative, and we\’ll collect it into government coffers and then spend it out again. He has also said that this is a way to close the deficit. And yes, he really has said that even if not that it used to be pay down debt. Which is, as we all know, a very different thing, this stocks and flows thing which is so important to economics.
That is, that he\’s going to use the collected tax money to reduce the gap between what the government spends and what it collects in taxes. This is, I\’m afraid, simply fiscal contraction: austerity.
I wouldn\’t mind his parrotting of crude Keynesianism quite so much if only he could provide any evidence at all of actually understanding it.