Richard's still arguing that it's wrong to make cuts now:

Their significance is in the hype that surrounds them and the underlying political message associated with that messaging. The message is twofold: first that the state is too big and is to be cut in size irrespective of the economic consequence of doing so. Second, the government has decided that at a time of mass unemployment it will add to the number of unemployed.

Where Ritchie has lost credibility is that he and his ilk appear to believe, conversely to the view he sets out above, that the state is too small and has to be expanded irrespective of the economic consequence of doing so.

The Labour government was desperately profligate. It achieved so little, yet ran up £500bn of debt in doing so. That's an extraordinary £1,000 per second spent above and beyond what it raised in tax.

Yet Ritchie thinks we should spend still more. Perhaps he should study his Byrne... there's simply no money left.

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Filed under: Economics, Taxation with tags deficit, labour, liam byrne, richard murphy