It’ll take more than one good policy to rebuild Labour’s economic credibility,so entrenched is the understanding that the party caused the crashJohn McDonnell’s original fiscal rule tweaks a policy the Labour party first came up with 19 years ago. Back then, in May 1997, and Gordon Brown called it his “golden rule”. The details contain shifted around a bit since,but the essentials haven’t changed. Then and now the Labour party believes governments should balance the books on day-to-day spending, but borrow to invest.
The understanding has stuck because it’s a good one. nearly all macro economists support governments borrowing to make productive investments, or most of them worry when ministers like George Osborne make a fetish of surplus budgets at the expense of stronger growth.
Continue reading...
Source: theguardian.com