Feb 04, 2015
from 06:00 PM to 07:30 PM
|Where||McGrath Centre, St Catharine's College, Cambridge|
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Here is a film of the presentation that took place on 4 February 2015
John Weeks is Professor Emeritus of Development Economics and former Director of the Centre for Development Policy and Research, SOAS, University of London. His most recent book is 'Economics of the 1%: How mainstream economics serves the rich, obscures reality and distorts policy' (Anthem 2014). Is technical critique of mainstream economics is found in his 2014 book, 'The Irreconcilable Inconsistencies of Neoclassical Macroeconomics: A False Paradigm' (Routledge). He has advised governments on macroeconomic policy, most recently the central bank of Zambia. His recent research work has involved analysing capital flight from sub-Saharan countries (an African Development Bank project), cross-country analysis of so-called structural deficits (published in this year's Review of Political Economy), and the global pattern of the post-2008 great recession. His non-technical articles frequently appear on 'Open Democracy', 'Conversation UK', 'Pieria' and 'The Real News Network'. He has a blog column in the 'Huffington Post'.
All but a few politicians and most of the media present as needing no defence that governments should continuously balance their budgets and not accumulate debt. Lack of an economic or even accounting justification for balancing the budget has not stopped this fiscal foolishness from justifying appallingly anti-social policies under the umbrella of 'austerity'. Part of this ideology is the fantasy that 'fiscal correction' will have little or no impact on total output or growth because expansion of the private sector automatically compensates for the contraction of the public sector. This presentation addresses the common justifications for reducing deficits: the affordability fallacy, the appeasing capital markets myth, and the superficially plausible 'structural deficit' argument.
In addition to their logical inconsistencies, all of these and others fail to recognize a fundamental economic relationship: when recession hits, fiscal deficits are not a problem, they are part of the solution.