How much attention should politicians pay the competing groups of economists?

Tankus

The only ones we should take note of are the wealthy ones.
Bloody salaried academics will go for flavour of the month with extra added hindsight after, or whoever is paying for the lunch. !

Michael Booth

about the same attention they pay to the voice of public opinion...

Andy H

What planet do these people live on? They must exist in some sort of binary world where you can either spend money without restraint or cut.

All I want the government to do is accept that the debts are too high and begin to cut those areas that we can live without.

Why do they have to discuss this in terms of all or nothing.

How about a sensible approach whereby government spending is graded and then prioritised.

So for example, we look at budgets to maintain services at the front line and protect them - (NHS medical staff etc..)

We then look at services that we can live without and cut them. (ID cards / Tax credits, dustbin police etc.

Can it really be beyond these so called economists to get their head around this?

Fergus Pickering

Of course Economics is not a Science. Can you replicate experiments? No. That does not mean it is unworthy of study. Ethics is not a Science either.

oldtimer

If it is a science, then the UK economy is being tested to destruction by the Brown experiment. Not something, I imagine, anyone else will want to replicate - an essential step to demonstrate an outcome of an experiment - unless your name is Balls.

wrinkled weasel

I used to be in awe of economists. Not any more. It's hocus pocus. It is gambling on what people are going to think.

Clearly nobody learns from the crises we have in the economy, apart from a few people who are in a position to actually influence the markets - people like George Soros, who, two weeks ago was talking down Gold as a "bubble", and is now buying it. In effect, he gambles on what people think.

The only irrefutable fact is, you cannot spend your way out of trouble, unless you can kid the rest that you really do have money, and in the case of UKPLC, we have been decanting Tesco Value gin into Ratner's crystal for so long, it aint foolin anybody.

Fernando

I hope we have a lively peer review of the letters from the 60 economists.The argument is not that it would be desirable for the government to support demand at a time of recession, but whether this is possible. It obviously wasn’t possible for Greece or Ireland. In claiming that it is possible in the UK they cite some historical comparisons and an optimistic government forecast.
Are all their figures accepted?
1. They mentioned that the current level of the national debt as a percentage of GDP is below that of most peacetime years from 1815 onwards. But why just exclude the war years as the debt hung over the country for decades after the wars ended. This was especially true after the two world wars last century. Indeed, in what were arguably the two golden periods for the UK economy – from 1880 to 1914 and from 1980 onwards the debt was below 50%. The key point is that during peacetime the debt has never before increased at the current rate and that is what is worrying the markets.
2. They also state that the debt will peak at 78%, which is the figure quoted in the pre-budget report. But this excludes the effect of the financial interventions to save the banking system – a rather large exclusion. There are also many other obligations – notably pension liabilities and off-balance sheet PFI liabilities – which certainly weren't present when making comparisons with the past. Also, how accurate is the Treasury’s forecast, as just a year earlier the chancellor had stated that the debt would peak at 57% of national income.

2trueblue

We should only listen to those who predicted that there were real problems in the first instance. From memory very few. In 2007 people were still piling into commercial property and equities. It took the reality of Northern Rocks inability to raise money on the markets for the real truth to catch up with a lot of people.

Perhaps someone could pull a list together of those now cuddling up to Brown and those who had even a vague idea that it was all going pear shaped then. It would make very interesting reading and should shut a few people up.

It is crass to equate investment in the new public sector jobs (which it is said are mainly going to foreigners) with real investment in the private sector. If you use that analogy then it is cheaper to have people on the dole until it is sorted out.

Debt is debt and has to be sorted out. We do not know what the real figures as we have a totally dishonest government, so only when/if they are booted out will we learn the real amount.

DavidDP

If all the economists in the world were laid end to end, they'd never reach a conclusion.

Gawain

It may be a social science or a pseudo science but as it is too reliant on history, philosophy and politics and it's hypotheses can only be tested by events not experiment it can never be a pure science. In this country, as an intellectual discipline, it has become fallen into the grip of mathematicians and statisticians. Despite this these economists use history as their guide to future action. Blanchflower actually declared on Channel 4 News last night that starting to cut now would result in a repeat of the 1930s Depression. He may be right but he cannot know this, whatever his mathematical model tells him ! Any historian could tell him that history can teach you what alternitives were in the past and that the present doesn't have to be as it is, but, as a means of predicting the future history is pretty hopeless. I would rather trust people with experience in running large organisations succesfully, people who have experience in managing their fellow human beings and actually practising economics in a real environment. Most of them are saying the deficit has to be addressed sooner rather than later. We're in a situation where instincts and common sense may well be more useful than grand theories.

andrew

keynes also said "in the end, we're all dead" not the ideal philosophy for a country planning on being around for a few generations to come.

Roy Smith

It's one thing having a science on the subject but another sticking to the bakers ingredients in a changed kitchen environment.

Dorothy Wilson

Perhaps we should ignore the lot of them and rely on the wisdom of Mr Micawber!

Ali C

Lots of us thought the economy was massively overheating in 2005 onwards - house prices were a major symptom. It should not be so that a single person on a 'decent' wage cannot afford a mortgage. It was even then unsustainable, but Brown et al did nothing to stop it. You didn't need to be an economist to spot that.

THX1138

Lots if you agree with them, none if you don't.

Tom Pride

Sixty? Pathetic. Where are the other 304 hiding this time? Probably once bitten twice shy.

As Mervyn King and others learnt the hard way, when a bunch of yesterday’s lefties get up a round robin, find your excuses and run a mile if you don’t want hindsight to show you up.

The world was going to come to an end as a consequence Geoffrey Howe’s 1981 budget – so the 364 warned us – when he cut government borrowing in a recession, but, oh! It didn’t.

A load of pompous, self-regarding, self-satisfied statists, with their self-evident, sanctimonious and imagined inherent moral superiority, wallowing in a shared warm bath of self-righteousness.

TomTom

It matters who is holding Gilts. After 1815 the British Gold Standard was the global currency and Gilts were held by British investors and Briain had a savings surplus.

The world after 1918 was far different with Britain owing the USA huge balances and having sold off overseas assets to fund the war. By 1921 25% public spending was on debt repayment and wage cuts followed Churchill's move back to the Gold Standard at $4.8675 together with
a General Strike.

After 1945 the Parity was indefensible, the Sterling Area dismantled at US insistence and Exchange Controls introduced 1949-79 with rationing pof food, clothing , furniture until 1952.

The arguments advanced by these economists are half-baked, and fail to recognise the difference between funding yourself from your domestic savings and having to import savings from foreigners when trade balance is persistently in deficit and inflation is a peril.

The destruction of the currency is very likely, but that might be the objective of those advocating destroying domestic savings and debasing the currency such that the Euro appears a safe haven

Occasional Ostrich

Fergus Pickering
February 19th, 2010 5:38pm

Right on, Fergus!
I've been trying to argue both points for years, but regularly find myself shouted down; I might have got away with it if I'd stated either thesis as succinctly as you.
It seems to me that you only have to try underpinning a theory with some simple maths and it is immediately upgraded to a 'science'.

Major Plonquer

If we could put them all in a ring and make them fight it out - last man standing wins the economic arguement - we would get a much better answer.

Keynes vs Milton at the Milton Keynes Arena. The future of the planet to be decided by two falls, two submissions or a knockout.

Fergus Pickering

I think, Major Plonquer that 'Big Bear' Keynes could see off 'Weed' Friedman in npretty short order. Of course if you werervto put JOHN Milton intothe ring he'd have Keynes for breakfast, lunch and tea. You should see his Pandemonium Body Slam!