Cable: Hammond’s position on public sector pay unsustainable

Chancellor Philip Hammond was quite happy to tell Andrew Marr that his Cabinet colleagues didn’t trust him on Brexit, but not so quick to deny that he’d said that public sector workers were overpaid. Our shadow Chancellor and almost leader Vince Cable had this to say:

I am very surprised by Philip Hammond’s reported comment the public sector workers are “overpaid”. Who exactly is he talking about? Nurses? Teachers? Police officers? Servicemen and women?

There is very clear evidence of chronic shortages and recruitment difficulty in many of our essential services. Basic economics, let alone wider ideas of fairness suggests that Hammond’s position is totally unsustainable.

Allowing inflation-offsetting increases is reasonable and affordable if some of the extravagant tax cuts of the last two years were to be revoked.

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33 Comments

  • David Becket 16th Jul '17 - 12:55pm

    Vince is spot on. The Tories should not have been cutting taxes whilst working people are suffering. The one exception could be the raising of the threshold, as that helps those on low income, but it also helps those who do not need help.
    May promised to help those just managing, she has done nothing, except shed tears when she realised what her own arrogant stupidity had done to her.

  • Eddie Sammon 16th Jul '17 - 5:14pm

    Good for Vince to get something out on this so quickly. If anyone is overpaid it’s Premier League footballers and some business owners. Seven years of Austerity is enough, time to end the public sector pay cap.

  • Dave Orbison 16th Jul '17 - 6:03pm

    Vince Cable calls for a public sector pay freeze!!! LibDem Conf 2009

    https://www.theguardian.com/politics/2009/sep/20/vincentcable-libdemconference

    And surely enough the LibDems ensured this was delivered year-on-year. And just like Student Fees is rightfully destined to haunt future LibDem campaigns. All this whilst underlining the age old criticism of LibDems as being opportunists. Doesn’t bode well.

  • Joseph Bourke 16th Jul '17 - 6:38pm

    Dave Orbison,

    why on earth would you not call for a public sector pay freeze when facing a massive loss of tax receipts from the financial crash in 2008 and at a time when public sector pay levels had outstripped private sector pay for a decade.

    Now, after 7 years of pay restraint, as private sector and public sector pay levels have equalised this is an issue of what Cable calls “Basic economics, let alone wider ideas of fairness.”

  • Dave Orbison 16th Jul '17 - 7:03pm

    Joseph Bourke – perhaps because many are on low pay and so would suffer real hardship possibly even having to rely on foodbanks. Or perhaps because we don’t want people to turn away from working on this sector and end up with a nursing crisis. Or perhaps because the banks could have afforded to and should have paid for their mistakes rather than nurses, firefighters and others excluding MP’s who so brazenly increased their own pay. But if you think a year-on-year pay freeze was fair shout it out from the roof tops. The LibDem Coalition was right, they were fair the public sector had to pay – well someone had to after all.

    I note that in the article Charles Kennedy cautioned against such a move. No surprise there as the LibDems so spectacularly lost their way and alienated so many traditional supporters. But at 7.4% clearly you were right all along.

  • Mick Taylor 16th Jul '17 - 7:33pm

    Times change, political issues change. ‘ when the facts change, I change my mind. What do you do Sir?’ (J M Keynes). According to Mr Orbison it’s what you did 7 years ago, not what you think is right today that counts.

  • Dave Orbison,

    there were people in need of help in 2009 but not generally those working in the public sector where pre-crisis spending and employment levels were largely maintained. The increases in unemployment and low pay issues fell primarily on workers in the private sector during the recession. The recruitment problems that have developed over the past couple of years in the NHS and teaching have been exacerbated by the Brexit vote and will continue to worsen until this is addressed.
    The public sector have pay commissions established to ensure pay levels remain comparable with similar level jobs in the private sector. The private sector is the real area of pinch, particularly self-employed workers driving cabs or making deliveries and those working for private contractors as cleaners care assistants or on zero hours contracts.

  • ‘The public sector have pay commissions established to ensure pay levels remain comparable with similar level jobs in the private sector. ‘ ….I’m terribly sorry but that is simply not true… full stop. I worked in HMRC until 3 years ago, and the government ignored any reports which would have led to pay increases. Real pay in much of the Civil Service has been falling under several governments for at least 20 years, unlike MP’s pay, where not surprisingly they implement the pay review recommendation like the bunch of hypocrites they are.

  • Mark,

    it is true that there are public pay review commissions. I don’t argue that real pay has not been stagnant or falling, but this is the case in the private sector too and not just in the UK https://www.economist.com/news/finance-and-economics/21615589-throughout-rich-world-wages-are-stuck-big-freeze.

    This is a developed world economic issue not simply a political decision of successive labour/coalition/conservative governments in this century.

  • Dave Orbison 17th Jul '17 - 7:05am

    Mick Taylor – what you did 7yrs ago does count. Not just my opinion, why on earth do you think the LibDems continue to be hammered in polls, why did they get only 7.4%?

    What will it take for you to ‘get it’?

  • Joseph Bourke 17th Jul '17 - 1:43pm

    Dave Orbison,

    the cap on Public sector began with the pay freeze implemented by Alistair Darling in 2009 https://www.theguardian.com/politics/2009/oct/06/public-sector-pay-freeze-order tearing up the multi-tear pay deal that existed in 2009. It was subsequently amended to a 1% rise cap in the coalition government.

  • Dave Orbison 17th Jul '17 - 7:45pm

    Joseph Bourke – the pay freeze began with Labour 2009. Indeed. Thankfully Labour under Corbyn is an altogether different party heading in a different direction to those that believe fighting for the centre ground is the only option and means of securing electoral success.

    There are many failed Party leaders who have trodden that path. All the more surprising that some here believe ‘centrism’ to be the salvation of the LibDems. Didn’t work in 2015 and worse still in 2017. A radical centre? Don’t think that works in my opinion.

  • I dont agree with when vince terms’ extravagant’ tax cuts. If he means the increasing the 40p starting point more people are in that rate than ever before and will be even if it goes to 50k. If its the CGT cut to 20% (stil 28% for property)it makes it merely about average in the world so not worthy of note. Plus there is no indexation for inflation anymore. If it is IHT given rampant property inflation and the exemption to that tax has been frozen for 7 years it also is not, given 1/2 of european states do not even have this tax. All these tax cuts total barely a few billion.

  • Peter Martin 19th Jul '17 - 1:47pm

    @Joseph Bourke,

    “why on earth would you not call for a public sector pay freeze when facing a massive loss of tax receipts from the financial crash in 2008 …………..”

    You’re indulging in household economic thinking here Joe. You and I have to adjust our spending in the same direction as our income. It’s the opposite way around for Government.

    So if the economy of the UK is £2.2 trillion it needs £2.2 trillion of spending to keep it going. So we can say that Government spends a £1 trillion and everyone else spends £1.2 trillion. It could be £900 million and £1.3 trillion. It doesn’t change anything in principle. But the problem for Govt is that it doesn’t know and can’t easily control how much we spend. Therefor, if we spend too much it has to spend less to prevent inflation. If we spend too little it has to spend more to make up for that.

    But if we are spending too little then its tax revenue is lower. If we are spending too much then its tax revenue is higher.

    See what I mean?

  • Joseph Bourke 19th Jul '17 - 3:02pm

    Peter,

    what you are describing is an accounting relationship between different sectors of the economy. Automatic stabilisers in the form of tax credits and unemployment do provide a cushion when private sector demand falls off in the wake of a economic shock.

    Public spending was not cut in the aftermath of the 2007-2008 financial crash. It increased sharply as a % of national income as automatic stabilisers kicked-in. The 11% public sector deficit was sustained while the private sector was deleveraging in the two years following the crisis. Total managed spending (TME) fell as a % of national income by 2.7% in the period 2009-10 to 2014-15 (as private sector spending accelerated fuelled by mortgage lending, car loans and credit card debt). TME is planned to remain relatively flat through to 2019-20 assuming there is no precipitous fall off in private sector spending.

    The sectoral balances matter. The greater the share of national income that is absorbed by resources committed to public goods, the lower the share available for consumer spending. Conversely, the greater the share available to households and firms the greater the level of economic rents that can be captured in the form of land rents, mortgage interest and monopoly rents from individuals and businesses.

    Rents and house prices have increased precipitously since the financial crash even though real wages have been stagnant or falling. Ask yourself why rent and house price inflation has been so severe and general inflation is outstripping wage growth, if the current public sector deficit at 2.5% of national income is too low for the UK economy.

    .

  • Peter Martin 19th Jul '17 - 5:07pm

    @ Joe,

    Yes the automatic stabilisers do work to some extent but do they provide enough of a cushion? If they did we would have seen much less change in levels of growth since 2008 than we have.

    All spending , whether consumer or otherwise, starts off with public sector spending. That’s where money comes from. The other variable is the level of taxation. If you’re of a more of a right wing economic inclination you might argue for less taxation. If you’re on the left you’d perhaps argue for more spending to stimulate a flagging economy.

    It doesn’t make any sense to try to reduce a deficit by increasing taxation even if spending itself isn’t cut. It doesn’t help to try to reduce the deficit by increasing VAT in the teeth of a rising recession. That just aggravates the problem.

    The government’s deficit does need to be understood as part of the sectoral balances as you say. The overseas sector is heavily in surplus so that means either the Govt has to be in deficit and/or the Private Domestic Sector has to be in deficit. In other words, someone in the UK has to do the borrowing to support the trade deficit. Or we devalue the pound substantially to encourage balanced trade.

    The increase in house prices has really been nothing to do with government spending or borrowing. It has everything to do with private sector spending and borrowing. The government has encouraged the private sector do more borrowing so it can do less without having to do anything about the trade balance.

  • Joseph Bourke 19th Jul '17 - 5:56pm

    Peter,

    Alistair Darling’s fiscal response to the 2008 crash was to maintain current levels of spending (freezing not reducing public sector pay) and cut taxes (VAT was reduced to 15%). The tax increases only came in the 2010 just before the election when the higher rate of income tax was increased from 40% to 50% and the public sector pay freeze was eased with a 1% pay cap instituted instead. The total tax take as a % of GDP has been fairly constant since 2010.

    A large part of the governments deficit spending has been financed by the BofE buying government bonds via its quantitative easing program.i.e. money creation within the government sector. This channel of monetary transmission has generated asset price inflation as bond yields have fallen. We have seen the resulting increases in both financial securities and property markets.

    Monetary induced asset price inflation coupled with increasing demand from a growing population and overseas investors reinvesting sterling reserves combine to push house price and rents to the limits of affordability. Consequently, fewer and fewer domestic households are able to purchase homes or afford rents in high demand areas. Higher wages for public sector,and or private sector workers does not of itself solve the problem of housing affordability, it simply bids up rents and house prices further.

  • Peter Martin 19th Jul '17 - 6:25pm

    @ Joseph,

    QE was effectively an asset swap of one type of Government IOU that didn’t pay any interest (ie cash) for another type that did (ie gilts and other bonds), so, as you say, the net effect was to reduce longer term interest rates. Shorter term interest rates are simply decided by the BoE ‘s monetary policy committee. They issued a decree that we’d have 0.25% last year so 0.25% is what we got.

    So it’s not so much a new “method of monetary transmission” that caused the bubble in house prices. We had one long before QE and before the 2008 GFC. Yes there are factors of immigration involved in housing demand but Germany, Holland and France have had high levels of immigration too without the same effect on their prices. Prices have risen because interest rates have fallen and they’ve probably risen even more as the expectation is they’ll rise even higher. That’s the mechanism of a bubble.

    Conflating the high level of house prices and lower than desirable levels of public sector pay is to obscure the causes of both . House prices aren’t high because nurses, policemen, and teachers etc are paid too much.

    They are both the result of political choices we make as a society.

  • Joseph Bourke 19th Jul '17 - 7:04pm

    Peter,

    QE is not merely swapping one type of IOU (cash created by BofE) for government bonds, when the BofE is buying bonds issued by the treasury to finance government spending. The money creation by the BofE feeds through to the real economy by financing and enabling large scale deficit spending that pays the wages of individuals and bills of firms providing goods and services to the public sector.

    Prices are determined by supply and demand,. The price of cars does not escalate because interest rates are lower, even though lower rates will increase the demand for cars. The reason is that the supply of cars can be increased to meet the increased demand and market competition can keep prices in line with production costs.

    The supply of development land in urban areas of high demand is highly inelastic. Consequently, as demand increases there is no commensurate increase in supply to contain increases in prices or rents.

    Increasing public spending on the basis that consumer price inflation is at or below a target level ignores asset price valuation, and the ever increasing share of disposal income that is taken up by rents/mortgage costs as a consequence of that inflation.

    Once you recognise the link between large scale public sector deficits financed by money creation and the consequent asset price inflation that feeds through to rents and mortgage payments, it is clear to see the importance of reducing the deficit to manageable levels in line with the trend growth of the economy.

  • Peter Martin 19th Jul '17 - 8:43pm

    @ Joseph,

    If you Goggle {QE is just an asset swap Fama} you’ll find a Nobel Prize winner saying just that. But having a Nobel prize in Physics might mean something. I’m not sure it does in economics. It really depends on whether you take a narrow or broader view of what’s happening. The point is that QE is no more nor no less inflationary than any other method of Govt spending. If Government borrows spending money at 1% does it really have any significant difference to just creating spending money at 0% ?

    To some extent you contradicted yourself by saying:

    “prices are determined by supply and demand”

    before then saying:

    “The price of cars does not escalate because interest rates are lower, even though lower rates will increase the demand for cars. ”

    The second part is true, generally speaking when the economy is working at significantly less than full its full potential. It would still be true even if Govt reduced taxes to boost demand or introduced a new for old car scrappage , or “cash for clunkers” scheme to stimulate demand. But it could be false, however that demand is increased, if it weren’t. Then prices would rise with demand.

    “The supply of development land in urban areas of high demand is highly inelastic.” Y

    Yes of course it is. So why are interest rate adjustments almost the sole mechanism by which the Govt seeks to regulate the economy? Even though they pretend they’ve devolved the power to the BoE! If the economy needs a boost we’ll see a reduction in interest rates. This means people are being encouraged to borrow more and save less. This ends up doing little more than driving up the price of the housing stock -creating a bubble. For every buyer at the higher prices there has to be a seller who is pocketing some extra spending money and it is this extra spending that ultimately kicks on the economy for a little while.

    Govt Deficits and surpluses can’t be considered in isolation. Or even just in connection with growth trends. You’ve mentioned the sectoral balances so you don’t need me to explain why. Ultimately what matters is steering the economy between the obstacles of high inflation on the one side and low levels of production (ie recession) on the other. Keep the economy ticking along nicely and let deficits and exchange rates take care of themselves.

  • Joseph Bourke 19th Jul '17 - 8:44pm

    Peter,

    this is Richard Hester (boss of RBS) speaking about QE http://www.itv.com/news/2012-05-11/hester-quantitative-easing-funds-bigger-budget-deficit/

    “What the Bank of England does in quantitative easing is it prints money to buy government debt, and so what has happened is the government has run a huge deficit over the past three years, but instead of having to find other people to lend it that money, the Bank of England has printed money to pay for the government deficit.

    “If that QE hadn’t happened then the government would have needed to find real people to buy its debt.

    “So the Quantitative Easing has enabled governments, this government, to run a big budget deficit without killing the economy because the Bank of England has financed it.

    “Now you can’t do that for long because people get wise to it and it causes inflation and so on, but that’s what it has done: money has been printed to fund the deficit.”

  • Peter Martin 20th Jul '17 - 8:57am

    @ Joseph,

    “…… but instead of having to find other people to lend it that money….”

    We often hear government borrowing expressed in these terms. It sounds plausible because that’s what we have to do. If we want to borrow money for a house, for example, we have to go to the bank and ask for a loan. It’s only very occasionally true for government. The government may, for example, in a time of extreme crisis, have to go to the IMF and ask for a loan. When was the last time that happened?

    But generally speaking, government debt is simply the savings of everyone who wants to save with it. If I buy National Savings certificates or Premium Bonds I’m creating Government debt. There are countries which like to run a trade surplus with us. So they, in the process, accumulate an excess of ££ which they can’t, or don’t want to, spend. If they did spend them they wouldn’t be in surplus. So they buy gilts instead to pick up a little bit of interest and keep their books straight.

    The government gets back its pounds which it then deficit spends into the economy to keep the wheels turning. If the country runs a balance of payments (trade) deficit of £80 billion pa then the government’s deficit needs to be £80 billion just to keep the same spending power in the economy. If the inhabitants of the UK want to save another £20 billion between them the Government’s deficit has to be £100 billion.

    That’s the sectoral balance arithmetic. Everything has to sum to zero so the Government has to hold the negative numbers so that everyone else has positive numbers.

    So why the need for QE? It was simply a mechanism for reducing longer term interest rates quickly when an emergency situation arose after the GFC. There’s much less need for it now that interest rates are much lower than they were when the QE program was at its height (2009 -2011).

  • Joseph Bourke 20th Jul '17 - 2:43pm

    Peter,

    the real world is based on the institutions created in society. As any Chancellor of the exchequer will tell you the budget deficit matters to the financial markets, the exchange rates and confidence in the economy generally.

    It is reasonable to suggest that over the course of the economic cycle, governments should seek to get close to balancing the structural deficit. However, there can be good reasons to run a deficit – at least in the short term. – For example, if the government wishes to fund public investment which offers a decent rate of return. Also in a recession, a budget deficit can play an important role in managing aggregate demand. In a recession, the traditional fears of a budget deficit – inflation, interest rates, crowding out – often just don’t occur. But, government spending financed by borrowing from the private sector can return the economy to full employment quicker.

    The institutions of society are based around maintaining confidence in the currency as a store of value and a medium of exchange. Inflation needs to be controlled by managing inflationary expectations. it is difficult to bring back under control once an inflationary spiral takes hold as it has done on Venezuela.

    Maintaining confidence in the currency requires setting out and delivering on budgetary plans for constraining government spending, incremental changes in taxation and managing public sector borrowing requirements.

    There may be an argument for a so called ‘peoples quantitative easing’ or spending without recourse to taxation or borrowing, when faced with the prospect of a deflationary slump, but not when unemployment levels are low and nominal wages are growing albeit modestly.

  • Peter Martin 20th Jul '17 - 5:00pm

    @ Joseph Burke,

    Chancellors of the Exchequer tell us all kind of things such as that interest rates and taxes would have to rise to pay for Brexit. Interest rates actually fell after Brexit. So maybe their comments are designed more to mold our thinking rather than offer some enlightenment?

    The Governments deficit has to be everyone else’s surplus. That just self evidently obvious. If we divide everyone else up according to where they live we can then say

    Government Deficit = Domestic Surplus + Overseas Surplus
    or
    Government Deficit = Domestic Savings + Balance of payments Deficit

    So anyone who says the deficit is too high is also saying that domestic savings are too high and that we are buying too many imports. So why not tackle the deficit from that end? Discourage savings and devalue the pound.

  • Joseph Bourke 20th Jul '17 - 6:04pm

    Peter,

    I’ll take a leaf from your book and offer up a Nobel prize winning economist by way of explanation. (I have a local party meeting to rush-off tonight)/

    https://krugman.blogs.nytimes.com/2011/03/25/deficits-and-the-printing-press-somewhat-wonkish/

  • Peter Martin 20th Jul '17 - 8:24pm

    @ Joseph,

    If I understand Paul Krugman correctly, he’s arguing against a group of economists who he claims are of the opinion that Govt debt/deficits never matter providing the deficit/debt is in one’s own currency. I’d be surprised if anyone did take such a view. Correct me if I’m wrong, but I don’t think I’ve said that. Perhaps you’re confusing me with someone else?

    Deficits do matter, except not in the way many think. It’s possible they can cause high inflation for example. The Government’s deficit is also important, and that means it matters, because it’s a reflection of the UK’s need to borrow to cover the trade deficit. This connection seems to be denied by right wing politicians and some, but not all, mainstream economists.

    I’m somewhat puzzled why they’d be so reluctant. Do you have any ideas on that?

  • Peter,

    the trade deficit has been at worryingly high levels for some time and an over-valued exchange rate has exacerbated the deficits.

    Overseas Sterling reserves tend to be reinvested in UK bonds and shares, commercial land and buildings, ‘privatised’ utilities, high-end London residential, student accommodation etc..

    Every year the UK as a whole adds to the stock of economic rent which seep abroad, enabling the foreign sector to acquire yet more UK rental streams.

    Devaluation is a potential solution, but relies on the assumption that the sum of price elasticity of demand for imports and exports is elastic (>1), the so-called Marshall-Lerner condition. However, this may not be satisfied in the short run, or even the longer run.
    Devaluation may also trigger cost-push inflation, where a fall in the value of a currency will increase the price of imported goods, in terms of the domestic currency

    The Brexit referendum result has inadvertently provided the UK with a sharp decline in sterling that may mitigate the impact of the high trade deficit level going forward as Professor Moody and Mervyn King explain in this article.
    http://www.telegraph.co.uk/business/2016/10/10/currency-guru-says-pound-slide-liberates-uk-from-malign-grip-of/

  • Peter Martin 21st Jul '17 - 8:26am

    @Joe,

    I’m surprised you’d provide a link saying that a lower pound is a good thing. I’ve been saying that for some time now, but its been a hard message to get across. Lib Dems consistently point to the fall in the value of sterling as evidence of the disaster of Brexit. They seem quite oblivious to the problems you describe of ever increasing rental streams which are helping to price out the younger generation from the housing market.

    The Marshall – Lerner condition has to hold. If the pound was worth nothing we couldn’t afford any imports at all. As its value increases we can afford more and at some value we can afford exactly the same value of imports as the exports we sell.

    You still seem reluctant to acknowledge the link between the Govt’s budget deficit and the trade deficit/BOP deficit. George Osborne was just the same. He ignored it then wondered why his tax revenue never quite matched up to his expectations as the economy declined under economic austerity. It was rather like watching a dog chasing its own tail. You knew that the gap between mouth and tail, or between revenue and spending was never going to close no matter how hard the dog or George tried.

  • Joseph Bourke 21st Jul '17 - 2:02pm

    Peter,

    Many countries operate with a trade and current account surplus – good examples are China, Germany, Japan, Norway and several emerging market countries with strong export sectors. Despite this surplus on the current account thy can and do run public sector deficits, as Germany did for over 40 years from 1969.

    Current account surpluses in these countries have to be balanced by deficits in countries with net imports, but it does not necessarily follow that this is the cause of public sector deficits defined as the gap between public spending and tax receipts.

    Even the USA managed to run a budget surplus under Clinton in 1998 while running up record trade deficits with the rest of the world.

  • Peter Martin 21st Jul '17 - 3:12pm

    @ Joseph,

    You’re right. The Clinton government did run a budget surplus around the time of the Millenium. There was also a trade deficit. So from the POV of someone in the US economy they were net paying out money to the Government and net paying out money for the country’s import Bill. This is only temporarily supportable. All this does is create the conditions which later push the economy into recession. It is merely an indicator that there is too much private sector borrowing happening at the time. This Millennium boom/bust was also known as the Dotcom boom and bust.

    The bust wasn’t so severe, the effect was largely ameliorated by creating a new boom in US housing which lasted until 2008. And we know what happened then!

    There was a similar story in the UK in the late 80’s. Nigel Lawson created a credit boom which led to high house price inflation. The external sector was in surplus ie there was a trade deficit. The government sector was in slight surplus around 1990. So the domestic sector had to be in deficict. The result? A slump in the early 90’s.

    There has to be a balance between the three sectors of any economy. The Government sector. The domestic private sector. The foreign sector. At least one has to be in deficit. The sectoral balance has to be zero.

    So a government surplus may not be a good thing if it creates a deficit in the private sector. It’s probably OK if there is a deficit in the foreign sector too (ie there a BOP surplus) but even that depends on the extent of the savings of the DPS.

    You were the first to mention the sectoral balances, which were largely the work of Wynne Godley. Keynes may have been just as aware but didn’t address the problem in quite the same way. But here I am suggesting you read up on them!

    https://en.wikipedia.org/wiki/Sectoral_balances

  • Joseph Bourke 21st Jul '17 - 3:41pm

    Peter,

    thank you for the link. I am familiar with the sectoral balances approach to analysis of stocks and flows in the economy and have a reasonable acquaintance with Chartalism. However, it is the interpretation of policy actions designed to rebalance flows, when the economy becomes unbalanced, that I think is of primary importance. In particular, how policy choices impact on productivity and the relative distribution of surplus value created in the economy between the different factors of production.

  • Malcolm Todd 21st Jul '17 - 4:32pm

    May I just say what a privilege it is to read these exchanges between Messrs Bourke and Martin. I have learned more about economics from these discussions than just about any other source and almost feel I’m approaching a glimmer of understanding…

    I’m afraid I’ve lost all faith in the Lib Dem party and almost all faith in modern politics; but for threads like this one I keep coming back to Lib Dem Voice!

  • Peter Martin 21st Jul '17 - 7:08pm

    @ Malcolm,

    It’s nice of you to say that. I was slightly concerned that we’d bored everyone to death!

    The penny started to drop with me on how the Economy works after I’d watched a series of short videos featuring Prof Randall Wray and Prof Bill Mitchell. It was a real “ah-ah” moment. Having said that, I’m not 100% in agreement. I’m much keener on having balanced trade than they think is necessary. Anyway here is the first one (Q1) if you’ve got a few minutes to spare and it’s easy enough to find the rest.

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