Peter Hoskin

Osborne tries to kickstart a mature economic debate

Osborne tries to kickstart a mature economic debate
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David has already blogged about George Osborne and Jeffrey Sach's article in the FT this morning.  But it's worth returning to what is as clear and as unalloyed a statement of Tory policy on the public finances as you'll have seen over the past few months.  

What I find most impressive about the article isn't so much its loose, perhaps nebulous, prescriptions for the economy - although they're sensible enough - but rather the way it acknowledges how some prominent academic and public figures hold a different view of things, and explains, in straightforward terms, why the Tories don't agree with them.  For instance:

"The financial models underpinning the two camps differ. Self-described Keynesians, including Paul Krugman, and Lords Layard and Skidelsky, see the financial markets as benignly ready to finance budget deficits, pointing to low market interest rates. By contrast, we believe financial markets are perfectly capable of getting spooked about the prospects of debt financing in the medium term. The dire market reactions to Greece may have a touch of panic to them, but are nonetheless having severe effects on the Greek economy."

This may seem like just a small thing.  But it's in stark contrast to the low point of the fiscal debate, a few weeks ago, when both Labour and the Tories were brandishing lists of economists as though they were all the proof necessary to show that their side had the best policy.  Far better, I think, to accept that economists - like parties - disagree, and to set out why you believe what you believe, as Osborne does here.  Anything less is treating the public like fools.  

Perhaps that serious economic debate, predicted by Math Bathgate last week, is just around the corner after all.