Well, yes Owen, but

As the NEF’s head of economics, Alfie Stirling, tells me, those justifying the latest raid on public sector wages by pointing out that private sector workers are also suffering miss the point: “If a public sector worker doesn’t buy an extra coffee each week, that costs jobs in the private sector.” The economy is not like a household budget: my income is your income, and if mine is cut, I spend less, demand is sucked out of the economy and you may end up working fewer hours, have your wages cut, or lose your job. And the cycle continues.

And if I am taxed so as to raise the public sector wages to buy a coffee then I do not buy a coffee and so demand is sucked out of the economy and…..

6 thoughts on “Well, yes Owen, but”

  1. If the Alfie Stirling was right, all we’d need to do to create ever more economic demand would be to pay public sector workers more. Funnily enough when it’s been tried in various failing left wing states (Venezuela, Zimbabwe), it ends in hyper-inflation. We do know what NEF stands for…

  2. Bloke in Nort Dorset

    If we add in the deadweight cost of collecting the tax then I could buy 1.x coffees, maybe even a coffee and a biscuit?

  3. ‘The economy is not like a household budget: my income is your income’

    I’m still waiting for my cheque.

  4. As a (highly skilled and massively qualified) private sector worker, I don’t have spare money to waste on buying overpriced coffee from Cafe Nero or Costa Coffee or whichever every week.

  5. Bloke in Lower Hutt

    Do my eyes deceive me or is Owen Jones espousing the trickle down theory in the Guardian? The world truly has gone batshit mental.

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