Today’s debate over fiscal retrenchment is obscured by five fiscal fallacies, writes noted City economist, Dr Tim Morgan in Five Fiscal Fallacies
In this report, Tim Morgan analyses the five fiscal fallacies propagated by opponents to spending cuts. He shows that:
- the UK’s past fiscal profligacy is unaffordable and unsustainable.
- the UK cannot borrow its way out of a debt problem.
- the planned spending cuts are not ‘massive’.
- there is no direct relationship between government expenditure and the quality of public services. The quality of any public service need not automatically suffer because of reduced levels of spending.
- excessive state spending impairs economic competitiveness.
The full report can be downloaded from here.
A statistical suplement is also available and can be downloaded from here.