“The Lib Dems are setting out plans as if they may have to deliver them”. Giles Wilkes on Clegg’s economic plans

Tighten Your Belt - AusterityGiles Wilkes was, until recently, special advisor to Lib Dem business secretary Vince Cable. He was the SpAd who famously slapped down News International’s advances when they were looking to lobby in favour of their proposed takeover of BSkyB. Before that, he was the chief economist at liberal think-tank CenteForum, where he was author of the award-winning pamphlet, ‘A balancing act: fair solutions to a modern debt crisis’, about which he wrote on LDV.

His Free-thinking Economist blog is a must-read, especially today as Giles covers the economics of Nick Clegg’s Bloomburg speech. I was perhaps overly dismissive of this in what I wrote on Monday:

In terms of policies, there wasn’t much that was new. Nick reaffirmed the to get the current structural deficit in balance by 2017/18 through a mix of tax rises and spending cuts: whoever’s in power after 2015 will have to do that, even the Tories, whether they advertise it up-front or prefer to renege after the election. … Nick also re-invented the promise of Gordon Brown’s Golden Rule: that government “will be able to borrow in order to fix our creaking national infrastructure”, something the Coalition chose not to do when interest rates were at their lowest.

Bill Le Breton challenged me in the comments, as he felt Nick’s comments signalled a more fundamental change. Which is fair enough: what Nick has set out is indeed significantly different to the Coalition mood music and to the stated aims of George Osborne to run an absolute surplus.

Here’s Giles Wilkes’ take in his post, ‘Future fiscal plans – what the LibDems seem to have said‘:

A simple question is whether the Parties’ implicit spending plans are credible. By credible, I mean whether they imply sums of money that are believable, given the needs and pressures that ordinary governments will face, and the political constraints they will be under. This is a different definition of “credibility” from the one implicit in certain speeches, where “credible” is somehow equated with “borrowing less than the other lot”.

My bottom line: I think Clegg’s plans suggest that the sums provided might be enough under LibDem plans. By implication they would also be enough under looser Labour plans. I don’t think that the sums would be enough under Tory plans. The political question is whether anyone notices or cares enough. Sooner or later they will; the bills come due. But whether in time for the next election is another matter.

These are the key bits from Clegg’s speech:
“we need to finish the job we’ve started. In Coalition we have set out a plan to get the current structural deficit in balance by 2017/18″.

The current Current Structural Surplus predicted for 17/18 is £9.6bn (Table D7, Budget).

“we will abide by a new debt rule in which we will significantly reduce national debt as a percentage of GDP, year on year, when growth is positive, so that it reaches sustainable levels around the middle of the next decade.”

When growth is 0.01%, inflation 2% and debt/GDP 80%, you can run a deficit of 1.6% of GDP and still have deb/GDP falling. This means at the end of next parliament borrowing some £30bn a year, which will be about the same as net investment. So they will be borrowing but only to invest: as the Guardian observes, this is fairly close to the Brown golden rule.

George Osborne, on the other hand, is aiming for an absolute surplus. This is £30bn tighter.

Ed Balls is aiming to balance the current account by 2020 – effectively hitting the same 2020 point as the LibDems, but on a different path. …

For now, it looks like Nick Clegg’s plans are at least far more credible than the Conservatives; they look like they have a decent chance of adding up and still being able to provide decent public services. You may sneer and ask whether it is relevant, but the LiBDems are setting out plans as if they may have to deliver them. Credit to them for doing so.

It’s well worth reading Giles’ post in full. (Here’s the link again.)

Nick Clegg’s speech sets out what, to me, seems almost inevitable: that whoever wins the next election is almost certainly going to have to raise taxes in order to avoid politically impossible cuts to spending. However, he is at least fronting up to this the right side of the election, ensuring voters are informed of what will happen.

The Tories, too, will almost certainly end up in this position, but are clearly hoping they can defer the day until after May 2015. The question is: will the media – and indeed the voters – let them get away with it?

* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.

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31 Comments

  • Little Jackie Paper 12th Jun '14 - 6:18pm

    ‘whoever wins the next election is almost certainly going to have to raise taxes in order to avoid politically impossible cuts to spending.’

    Sorry, but why are particular cuts, ‘politically impossible?’ Why are certain area of spend sacred cows? OK – particular cuts might not be popular with the public at large, but then so what – either an absolute surplus is a, ‘political imperative,’ or it isn’t. Unless you mean balance the budget on the backs of some particular sections of society.

    We can certainly have an argument about what, if any, ratio of cuts to tax increases is best. However that does not somehow mean that fiscal consolidation is only for, in effect, the working-age. Why exactly in an age when, supposedly, the deficit is a national crisis have we borrowed £2bn+ for winter fuel payments?

    Granted, talking the language of NHS service reduction (let’s not use, ‘reform’) is not going to go down well. Same for other things – most obviously pensions. However why should there be a blanket exemption for these whilst other things, most obviously students, defence and local authorities take a pounding?

    Once you start talking the language of political impossibility it starts to become an exercise in political cowardice. Now – sure – all of the major parties are guilty of that. But either the elimination of the deficit is the defining national issue or it isn’t. If it is then the popular causes need to feel the pinch, politically difficult or not.

  • Economic credibility and fiscal prudence will be vitally important aspects of the 2015 GE campaign. I can’t see the Tories admitting to plans for tax rises though – they will rely on the old growing the pie argument.

    The key economic points in NC’s speech were:

    “..because of the liberal belief in giving future generations every chance to succeed, we will abide by a new debt rule in which we will significantly reduce national debt as a percentage of GDP, year on year, when growth is positive, so that it reaches sustainable levels around the middle of the next decade. In other words: so long as the economy is in a good state, we’ll get debt down to safe levels, at a sensible rate.

    Second, once we’ve dealt with the deficit in 2017/18, we’ll balance the overall budget but we’ll do it in a way which still allows us to invest in the things we and future generations need. So a second, balanced budget rule, in which we run a cyclically adjusted balanced total budget, excluding capital spending that enhances economic growth or financial stability. What does that mean? It means future governments will have to live within their means and the money we spend on public services will grow roughly in line with the growth of the economy as whole. But we will allow for one significant exception: government will be able to borrow in order to fix our creaking national infrastructure. Because no one looking at Britain’s prospects for the future can overlook the fact that we are relying on roads, railways, an energy network and a housing supply which simply will not be able to support the aspirations and ambitions of future generations. Our railways are a throwback to the 1970s. We rely on water and waste networks from the 19th Century. We have some of the most congested roads in Europe. And if we are to meet our generation’s challenge to decarbonise our economy and prevent a climate crisis, almost all of this – from our energy networks to our homes – needs to be replaced or renewed with the newest technologies.”

    This is sensible policy. My only criticism would be, don’t wait until 2018/19 to begin making investments in housing and economic infrastructure that are needed to embed and sustain the economic recovery now as discussed in this earlier article https://www.libdemvoice.org/opinion-good-borrowing-and-bad-borrowing-27970.html

  • Tony Dawson 12th Jun '14 - 7:18pm

    Unfortunately, the presentation of a geek-credible argument by a person who is ‘toxic’ to the average voter, actually does harm to the credible argument in terms of public acceptance – and does no good politically to the person who is speaking.

    It is a bit like Europe. If Nick Clegg had seriously wanted the British public to ‘buy into’ “The Party of IN” he would have done far better if he had stay off the TV, gone on holiday for a couple of months and persuaded a handful of senior industrialists who had some credibility to spend some time promulgating that case in respect of jobs etc.

  • jedibeeftrix 12th Jun '14 - 8:16pm

    “So they will be borrowing but only to invest: as the Guardian observes, this is fairly close to the Brown golden rule.”

    This is all very well, but we are all now well educated in the basic desire of our equality-minded political tribes to rip open the spigot of cash on whatever they deem to be the next worthwhile social project.

    We saw it with brown, how will the lib-dem’s be different?

  • Tony Dawson 12th Jun '14 - 8:22pm

    @Little Jackie Paper:

    ” the popular causes need to feel the pinch, politically difficult or not.”

    Not strictly true. Anyone looking around can see examples of excessive affluence which are nothing to do with ‘a fairer society’ and arguably not necessary for ‘a stronger economy’. Whether curtailing this is sufficient to balance the books, I know not.

    But, of course ,nothing is really ‘politically impossible’. Just ‘very politically undesirable’ (and hence less likely to be done than other things) which will mean different things to people coming at the question from different stances. The only thing that, for an honest man, is genuinely ‘politically impossible’ is something that you have pledged.

  • Alex Sabine 12th Jun '14 - 8:49pm

    I haven’t yet had the chance to read Clegg’s speech in full, but based on the excerpts in the press and the analysis from Stephen, Giles, Joe and others I think this looks like a complacent policy. I say this for two reasons: for one thing, it seems to imply that once the deficit has been dealt with – and only the current budget deficit at that – the fiscal problem will be essentially sorted.

    Although Nick acknowledges the need to reduce the debt-to-GDP ratio, he seems to will the end without willing the means: or at least he envisages the debt burden declining at a pretty glacial rate.

    Of course Giles is right that movements in the debt ratio are a function of the primary budget deficit and nominal GDP growth, and that debt-to-GDP should come down ‘automatically’ if the economy grows at a reasonable rate and there is a measure of inflation. But remember the starting point here is that the debt ratio is expected to peak at almost double the 2007 level, which will impose big financing costs for future taxpayers and leave the public finances dangerously exposed in the event of another recession. In that context I don’t think it is good enough simply to let the debt ratio look after itself (declining by say a couple of percentage points a year) in the context of a growing economy: on that basis it will take until the 2030s to get it back down to the pre-crisis level. This is a far cry from Clegg’s oft-repeated aim of ‘wiping the slate clean’ for future generations. Indeed, I don’t think he has given serious consideration to what he means by that glib phrase.

    The second reason I regard the new Clegg formula to be complacent is that it seems to believe the most that can be expected of a prudent government in normal times is to run a balanced current budget while borrowing for investment. Whereas surely if it is permissible – indeed inevitable – that the budget will be driven into the red during recessions, there must be a corresponding obligation to run surpluses during the good times. Now, admittedly Clegg gives himself some wriggle room here by referring to the elusive concept of the structural or cyclically adjusted balance, which in theory would suggest cyclical surpluses during periods when the economy is running above its trend level. One difficulty here is that we don’t know the cyclically-adjusted position of the economy until it’s too late to be useful for policy, making it a handily malleable concept for politicians as we saw with Gordon Brown.

    Moreover, those of a more Keynesian bent should be all the more insistent on running not merely cyclical surpluses but structural surpluses during the upswing of the cycle, since they believe in an active role for fiscal policy in demand management – and they also need to create additional ‘headroom’ to allow for aggressive fiscal stimulus if the economy turns down. A future government is likely to be very constrained in what it can do if we were to enter a recession with public debt running at something like 70% of GDP. It would be like hitting a storm with the ship already half-sunk.

    My final objection is that this formula seems all too similar to Gordon Brown’s ‘golden rule’ for my liking and I am not convinced it is much more robust. Indeed there is a wider problem here with the way that Clegg and other Lib Dems accuse the last Labour government of irresponsible fiscal policy but seem unable to say what a responsible fiscal policy would have looked like during the 2000-07 period, or why exactly a reheated version of Gordon Brown’s ‘rules’ would magically prove more resilient in future provided Lib Dems rather than Labour politicians are at the helm.

    I fear this latest speech scores more highly as an exercise in Cleggite political triangulation – ‘tougher than spendthrift Labour, nicer than the mean bean-counting Tories’ – than it does as economic policy.

  • Little Jackie Pepper you sound angry I seem to recall LibDem wanted to include winter fuel payment into tax so in effect those who could better afford heat paid some back in the 20% or max tax rate. In my opinion if you cancelled the benefit and other parties said keep it you would lose vote share.

    The EU more or less suggested a mansion tax but in coalition can that be delivered does not seem so tax burden aimed at the members of society that can afford more is not easy I would almost certainly increase minimum pay so that employers pay more directly reducing profits for shareholders. Zero hour low hour contracts who in business tends not to charge more for smaller order maybe employers with less than ten hours should pay more than a forty hour contract per hour.

    I agree that books must balance all parties agree with HS2 bet that the majority of the electric would not spend that huge amount

  • No, LJP, that is what I have banged on about for ages – deficit elimination is not, and should not be the be all and end all of policy.

  • Eddie Sammon 12th Jun '14 - 9:41pm

    I hope the economy doesn’t crash, or perhaps enter a slow recession, but we seem to be listening to the same people who thought they had abolished boom and bust, only this time they think they have abolished the need for monetary discipline. Mark Carney sounds like a rabbit caught in headlights, with some of the words coming out of his mouth only making sense if no one used mortgages to buy houses.

    Most worrying of all for me, is that no one is talking about the stockmarket “bubble”. In my semi-professional opinion, this is the only reason why savers and pensioners aren’t up in arms. We seem to have short memories and think the only bubbles that matter are housing ones.

    Finally, to those that say “but the housing bubble is only in London”. Monetary policy has mainly benefited the London based banks, so tightening it will not have the same effect on the rest of the country as it will London. The stockmarket bubble is also a product of monetary policy, as people are searching for yield because interest rates are so low.

  • Economic credibility is important but now we have an independent Bank of England it doesn’t trump every other consideration. Everyone knows modern politicians are economically illiterate and rely on others. The markets are also more important than in yesteryear. Personal credibility counts for a lot. I’m not sure I’d believe Nick if he told me Monday would follow Sunday. Thanks Nick but its time for a change.

  • Eddie Sammon 12th Jun '14 - 11:42pm

    Dear Giles,

    I’ve just noticed on your blog you are a fan of NGDP targeting. The main problem with this is that it punishes people who own fixed income securities, especially pensioners who have bought fixed income whole of life annuities, of which there are many. In fact, it punishes this income group to such a degree that not only can it be cruel, but also create economic instability. The other problem is that NGDP is misleading, because it ignores inflation.

    The only economist I have ever seen raise the plight of fixed income individuals is Martin Weale. I think this is a result of economists focusing too much on headline figures, rather than how the headline figures breakdown between different groups.

    It makes little sense to be fiscally disciplined but monetary loose. I hope my comment to be constructive, from a former IFA who used to work with pension planning pretty much every day.

    Best wishes

  • jedibeeftrix 12th Jun '14 - 11:50pm

    @ Alex – “remember the starting point here is that the debt ratio is expected to peak at almost double the 2007 level, which will impose big financing costs for future taxpayers”

    Indeed, it is a matter of considerable regret to me that we pay more in debt interest than we do on the primary duty of the nation state; the provision of internal and external security for the citizenry.

  • Giles,

    this blog from Jonathan Portes in Jan 2012 discussing the unemployment gap (the difference between the UK’s actual unemployment rate, and estimates of the “structural” unemployment rate or NAIRU) http://niesr.ac.uk/blog/largest-and-longest-unemployment-gap-wwii#.U5of4Ysg8dU notes:

    “…if we accept a persistently high level of cyclical unemployment now, we will condemn ourselves to a persistently high level of structural unemployment in the future…. The most sensible argument against short-term fiscal stimulus comes from those (like Chris Giles in the FT, for example) who argue that the risks to credibility of fiscal easing are large, while the potential gains are small. In my view the risks are hugely exaggerated. But my point here is about the other side – the downside of inaction. If we do not do something to boost labour demand now, we are not just taking a risk. We are accepting the likelihood of continuing high levels of unemployment that will damage both many individuals and society as a whole.”

    He goes on to note that “..the OBR has recently restated its view that the current and prospective NAIRU is 5.25% and the OECD’s estimates for the NAIRU going forward are somewhat higher, so the gap would be somewhat smaller.”

    Similar arguments have been made with respect to permanently lost economic capacity during the past six years of low business investment shrinking the output gap. These commentators argue that the recession caused permanent damage to the economy’s productive capacity; and that the recovery we have seen to date may have been enough to eliminate the remaining slack. They argue that as the economy continues to grow, inflationary pressures will mount quickly allowing inflation to shoot back up to three per cent or above, forcing down real rates, fuelling the housing bubble and leading ultimately to an old fashioned, common-or-garden sterling crisis, requiring sharp monetary and/or fiscal tightening to stem the outflow of foreign reserves.

    Unemployment is forecast at 5.4% in 2018/19 i.e. at or near the estimated Nairu rate. However, with the rapid expansion in employment over the past year and unemployment currently at 6.6%, it seems possible that this level could be approached significantly earlier and trigger the monetary tightening that comes with it. Mark Carney’s speech at the Mansion House this evening has signalled that interest rates rises could begin sooner then expected i.e. potentially this year.

    With our monetary policy stance and yields seemingly heading only one way and higher sterling becoming a drag on exports – how is a regional and sectoral balanced economic expansion to be maintained if not through economic infrastructure investment and wage led demand driving productivity investment ?

  • My initial reaction to the new policy that Nick Clegg thinks he can just announce without it being agreed at Conference was to see if they are policies I can support.

    The second rule Nick wants, I see as an improvement on the old policy of balancing the budget. It is better to balance the overall budget while still allowing investment. I am not happy because Nick doesn’t want to see all investment (or capital spending) excluded from the aim of balancing the budget over the economic cycle, but I do. This doesn’t mean that I always want to run a deficit.

    I have criticised the first rule because I believe that it rules out having a budget deficit on non-capital government spending. However Giles Wilkes points out that the first rule would allow a deficit of 1.6% of GDP. I am still not happy because with economic growth of 0.1% there will be an increase in the number of people unemployed and there will also be a reduced tax take and these together may well cause this rule to be broken unless the government takes action to reduce the deficit further and so not get anywhere near the 1.6% of GDP deficit that could be allowable. I think this is a bad thing.

    Bill Le Breton states that it is possible that Nick doesn’t understand how much he has moved his position on the economy, the deficit and managing the national debt. So I have to accept that while I wouldn’t have created this policy and I don’t support it, it is a movement in the right direction.

    @ Alex Sabine

    Historically it is rare for UK government to reduce the deficit in monetary terms. I could only find about 10 years this happened since 1946. However on the positive side the National Debt was reduced from 237.12% of GDP in 1946 to only 59.71% of GDP in 2011 without doing it.
    http://www.ukpublicspending.co.uk/spending_chart_1900_2015UKb_XXc1li111tcn_G0t
    It is therefore not necessary to run surpluses in the “good years” for the debt to decline substantially.

    I agree with Alex in that I think it is difficult to identify the “good years”. However for me it is for the opposite reason. That at the time it is assumed we are in a good year and the break is applied but there is still space capacity in the economy that could be utilised if the economy is managed better.

  • Technical Ephemera 13th Jun '14 - 8:23am

    Interesting post.

    I am somewhat surprised Giles above uses the rather hawkish comments here as evidence the Lib Dems are somehow all neo-cons. It suggests he doesn’t realise this section of the site is open to non Lib Dems. A worrying lack of attention to detail.

    Little Jackie Pepper should get out more and talk to local government (the Lib Dems used to be involved back in the day). I spent yesterday talking to some very senior people in a number of large local authorities. Not that they would say it out loud but they are very worried. They can see the day coming when they have to stop providing critical services to the most vulnerable in society. The blog is correct, this is simply not a viable option unless you have state controlled media to airbrush the victims away.

  • Why is no-one talking about inflation?

    We should drop the 2% target (which has NOT achieved its stated aims of increased economic stability and wasn’t doing so even before the crash) and instead target levels around the 4-5% mark. Increased inflation – led by wages – will help drive the Debt/GDP ratio down and thus reduce the reduction in spending/increase in taxes needed to get the books in order; help deal with the legacy of personal debt; and allow interest rates to rise to more sensible levels.

    Low inflation is actively unhelpful in the current situation.

  • @ Jack
    An interesting suggestion. If we were not aiming to keep inflation at 2% we could stimulate the economy more and get more unemployed people into work. Sounds like a win, win situation unless you have savings. However the current situation is hurting savers now so not much of a change there then.

  • Eddie Sammon 13th Jun '14 - 7:36pm

    Guys, if we have inflation of 5% per annum in five years an annuity paying £20,000 per annum would only be worth £15,671. It’s a cruel policy and for what? To believe that printing money helps the economy? The penny is cheap enough.

  • Alex/Jack,

    re: ‘wiping the slate clean’ for future generations’ – you might like this article http://www.thisismoney.co.uk/money/news/article-2370371/Should-write-UKs-debt-stop-inflation-plan-eating-money.html.

    The author notes the last time there was a formal plan to run budget surpluses to pay off the debt was in the 1720s. The then Prime Minister, Sir Robert Walpole, created a ‘sinking fund’ from death duties to pay them off. Even this plan didn’t last long, as his successors found better uses for the cash.

    His proposal is Plan C – buy the rest of our debt and write it off:

    “There is one alternative that has not been talked about much though. That is that Mark Carney is persuaded to write a cheque for £1 trillion and writes off all the UK government debt. The slippery slope of moral hazard from monetising government debt has already been crossed. The Bank of England (which is effectively a government department) already owns about a third of the debt. Why not finish the job off?
    More than likely this would result in a plummeting pound and associated short term inflation from the rising prices of imports. That inflation could solve the UK mortgage debt problem.
    The former might create a reset that would suddenly make the UK one of the best places to outsource/manufacture and the economy would probably flourish.
    Within five years, the UK would be booming whilst Euroland still languished. The pound would then recover and a period of low inflation or even positive deflation might occur.
    Let’s be brave and think outside the box, rather than accepting years of inflation tax eroding the wealth of savers and the standard of living of all of us.”

    A tad more radical than Jack’s proposal but along the same lines of thinking, nonetheless.

  • Eddie Sammon 13th Jun '14 - 8:02pm

    Anyone advocating mass money printing is either thick or nasty. I’m sick of providing reasoned arguments against it.

  • Eddie,

    these kind of uber-radical proposals are more tongue-in-cheek than realistic policy, but the linked article makes some cogent points about who bears the cost of the so called inflation tax – similar to your own observations.

  • Eddie Sammon 13th Jun '14 - 8:34pm

    Thanks Joe. Sorry I was too harsh in my post, but if someone says the route to national prosperity is money printing and you show them why they are wrong and they say it again then I think it deserves a firm response.

  • @ Joe Bourke

    My initial response to the plan C of Pete Comley you posted was NO WAY! You can’t have such a huge amount of inflation and the last thing we need is deflation (look at Japan). However as the Bank of England has already a third of debt then why not increase it gradually over time and so reduce the debt interest over time as well. It could even be linked to relaxing the inflation target.

    @ Eddie Sammon

    I don’t have any answer for those with annuities. Those people with savings have always taken the hit. The only thing the government does is to ensure it is a small hit every year rather than a huge one. Maybe we should just accept that annuities are a bad investment and so should be scraped and the money given back so it can be invested in other things or spent?

  • Eddie Sammon 13th Jun '14 - 10:36pm

    Hi Michael, that is the problem: if we agree that the many thousands who own fixed rate annuities shouldn’t bear the brunt of the cost then who is? Bondholders? The general public? The money has to come from somewhere and due to the nature of fixed rate bonds, annuities and other contracts it seems the best thing to do is to aim for stable prices, rather than just higher inflation.

    Regards

  • Eddie Sammon 13th Jun '14 - 10:46pm

    It would also erode the value of millions of life insurance policies with fixed amounts written into them.

  • Eddie Sammon 13th Jun '14 - 10:50pm

    Life insurance isn’t as bad because it generally isn’t single premium like annuities, but it still poses administrative problems. I’m going now. Goodnight.

  • @Eddie: it’s always nice when you can assert you’ve got the right answer and not bothering putting forth an argument, isn’t it?

    Savers with fixed return investments will be hurt by moderately higher inflation, yes, but currently savers with variable rate savings and savers with new fixed rate savings are being hurt by the combination of weak growth and very low interest rates. Allowing inflation to rise to a modestly higher, but still stable, level allows interest rates to rise alleviating the affects of inflation and allows the economy room to breath by reducing the burden of debt. That growth should allow saving to be more beneficial in the longer term.

    The fact is that the modern obsession with really, really low inflation hasn’t done the economy much good at all. Stable prices have not led to the economic stability it was predicted they would but, instead, it has increased the degree to which debts form a continuing millstone around the neck of millions as well as the country itself.

  • Eddie Sammon 13th Jun '14 - 11:52pm

    Jack, I’m not falling out with anyone over this, I’m just saying balancing the books mainly on the backs of annuity holders or first time buyers is not fair.

  • Jack,

    I am not sure low inflation is a purely modern obsession. Keynes wrote ““By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some”

    Hugh Dalton adopted a policy of cheap money/higher inflation as a means of tackling the post-war debt and we seem to have been in an inescapable spiral of needing to inflate away periodic debt accumulation without causing too much damage to the wider economy ever since.

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