Dec
11

Austerity is Awful

The risk of front-loaded fiscal austerity in the UK is that big cuts in spending, subsidies, public employment & increases in taxes will have a recessionary effect on an anemically recovering economy. A credible early commitment to gradual fiscal consolidation phased in in a back-loaded manner would have reduced the risk of a double-dip while maintaining the authorities’ commitment to credible fiscal consolidation.

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