Wednesday, October 22, 2014

Britain Calling

Ha-Joon Chang has a nice article in The Guardian, examining Britain's disastrous experience with austerity: a fall in income for millions of citizens, and growing inequality as an unreasonably high share of the nation's income goes to the top 1% .  We in the US have had somewhat the same experience*, yet in both countries the dominant narrative remains the same: debt is bad, and deficits must be cut.

Chang counters:
The country is in desperate need of a counter narrative that shifts the terms of debate. A government budget should be understood not just in terms of bookkeeping but also of demand management, national cohesion and productivity growth. Jobs and wages should not be seen simply as a matter of people being “worth” (or not) what they get, but of better utilising human potential and of providing decent and dignified livelihoods.

* though in our case mitigated by the 2009-2011 stimulus, the automatic stabilizers of food stamps and unemployment insurance, and the Fed's quantitative easing.

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