Consider, for example, the government’s planned fiscal consolidation. In 2009-10, public spending was 45.7 per cent of gross domestic product; and receipts 35.5 per cent.According to the July Budget, by 2019-20, spending will have been reduced to 36.3 per cent of GDP, while receipts will have risen to 36.7 per cent. Thus virtually all the burden of achieving a fiscal surplus will fall on spending, which will then be far below levels in, say, Germany.
This was a political choice, not an economic necessity.
Wolf is right.
But I have to say the way he frames his argument now feels very outdated to me.
More on that later, if I get time.