Wednesday, May 19, 2010

Dismal science

I am easily swayed by most kinds of economic arguments, which makes it easy to convince me of many things. The ones towards the extremes of the spectrum are easier to deal with (i.e. harder to convince me of); for instance I can generally pick holes in statements like:
  • if it moves, nationalise it
  • if it moves, privatise it
  • make all black people the private property of white people and don't pay them anything
  • start a war to create jobs and boost the economy
  • make the rich even richer so that their wealth will trickle down to the rest of us.
The further towards the middle ground, though, the harder it gets. Am I a Keynesian? Am I a monetarist? Goodness knows. (I do believe in feeding a cold, if that helps, but only because I see no point in multiplying personal misery when an easily obtained placebo is to hand.) Maybe I have some strange idea that human beings are way too complex for this kind of thing and the kind of theory that is appropriate on Monday afternoon may be completely out of touch come the circumstances of Tuesday morning.

But this guy seems to make sense, and I don't just say that as a public sector employee: "The only way to cut government debt is to increase government spending". Discuss; or, failing that, tell me where he's wrong.


  1. Sebastian2:29 pm

    I'm no economist, but surely more unemployed = more people in work calculating benefits etc. It's not quite as simple as that, but food for thought. Better food for thought. - don't the banks owe the UK Government £200bn or so? - If they don't pay, send in the bailiffs. Once they pay us back, then the 163bn defecit will become a 37bn credit. Thats about £3000 each. -the unemployed shouldn't get any. They only spend it on England flags anyways ;)

  2. I think the actual calculation of benefits is done by a computer. Added staff resources are just needed to say "computer says no", at a rate of 1 new appointee per every several thousand unemployed. So mass unemployment might create a few new jobs but not enough to offset.

    I think you're only meant to send in the bailiffs if existing credit arrangements have failed, but any measure that reduces the number of England flags waving from cars has my full support.

  3. Is it worth pointing out the cost of employing them is considerably more than their salary?

  4. I think the facilities that they will work in, i.e. Jobcentres, are already there so apart from the administrative load (paperwork, also done by computer) would the cost be that high?


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