The deficit threat

Chris Dillow

Chris Dillow

I have been loath to enter the debate about whether cuts in public spending will harm economic growth, as this has become a merely tribal issue. However, I fear that they will do so. I say so not because I'm a Keynesian - Keynes was perhaps the most over-rated economist of all time - but simply because I don't see what parts of aggregate demand will take up the slack created by weaker public spending. Let's run through the possibilities.

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