I never thought I’d be able to say this without laughing, but in this case we need to follow IMF advice.

Notes from a Broken Society

Austerity has become the default mode of European – more especially British economic policy; in his speech to the Conservative Party conference last week David Cameron reiterated that there is no “Plan B” and mocked the Labour Party for its alleged tax and spend profligacy – even though the statements of shadow Chancellor Ed Balls appear to lock Labour into an endorsement of austerity that is in many respects more rigorous than that of the Coalition, raising the prospect of deep cuts after 2015 on top of those that the Tories have already made.

Against this background, it has been fascinating to read the assessment of Jonathan Portes, director of the National Institute of Economic and Social Research (NIESR), on his blog Not the Treasury View.  In my view his analysis is desperately important.

Portes’ assessment matters because it goes right to the heart of the theoretical justification…

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