{"id":25217,"date":"2014-06-23T08:22:45","date_gmt":"2014-06-23T07:22:45","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=25217"},"modified":"2014-06-23T08:22:45","modified_gmt":"2014-06-23T07:22:45","slug":"the-dead-hand-of-austerity","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/06\/23\/the-dead-hand-of-austerity\/","title":{"rendered":"The dead hand of austerity"},"content":{"rendered":"<p>Paul Krugman had a column in <a href=\"http:\/\/krugman.blogs.nytimes.com\/2014\/06\/20\/austerity-and-hysteresis\/?_php=true&amp;_type=blogs&amp;_php=true&amp;_type=blogs&amp;module=BlogPost-Title&amp;version=Blog%20Main&amp;contentCollection=Opinion&amp;action=Click&amp;pgtype=Blogs&amp;region=Body&amp;_r=1&amp;\" target=\"_blank\">the New York Times on Saturday<\/a> that suggested that there is strong evidence to suggest that for every \u00a01% of austerity that is imposed by a government then 1% of\u00a0capacity is lost in the economy. The argument \u00a0appears to be compelling.<\/p>\n<p><span style=\"font-size: 14px; line-height: 1.5em;\">Now think about this in the UK context. If 1% of austerity really does reduce GDP by 1 percent, then the \u00a0current government's austerity \u00a0programme from 2010 to 2015 might have reduced potential output by 6 percent (although I accept that this arguable). That may equal about \u00a390bn. If the tax share in GDP is 40% then that equals \u00a336bn - enough to reverse all the social security budget and some of the other cuts as well, without having to make additional tax rises.<\/span><\/p>\n<p><span style=\"font-size: 14px; line-height: 1.5em;\">If only Labour would think in these terms rather than accepting George Osborne's austerity economics we'd face real choice \u00a0at the next election, \u00a0and the prospect of retaining incredibly valuable services.<\/span><\/p>\n<p>The fact is that the multiplier works, even in reverse. And that is what the evidence shows.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Paul Krugman had a column in the New York Times on Saturday that suggested that there is strong evidence to suggest that for every \u00a01%<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/06\/23\/the-dead-hand-of-austerity\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"class_list":["post-25217","post","type-post","status-publish","format-standard","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/25217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=25217"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/25217\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=25217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=25217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=25217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}