What Makes Economic Sense - Government Budget Surpluses or Deficits
The British Government announced plans for permanent budget surpluses designed to cut the national debt arguing it will allow the government to borrow only in exceptional circumstances and ensures successive governments run a budget surplus.
But others have argued that the obsession with reducing national debt needs to be seen in a broader historical context. The current national debt of 80 per cent of GDP is not exceptional. Indeed, the UK welfare state was built against the background of high debt as that facilitated redistribution of wealth and investment in industries and improved people’s purchasing power.
The net result was higher economic prosperity and lower national debt. In times of recessions and economic turbulence, only governments have the capacity to bailout companies and stimulate the economy. The self-imposed fiscal straitjacket is a recipe for social instability..
The UK Budget 2013: Analysis by Gresham Professor Douglas McWilliams
This video is an excerpt from Douglas McWilliams' lecture as Gresham Professor of Commerce, 'The Winning and Losing Nations'.View video profile
Kate Andrews discusses Osborne's budget surplus law on Sky News
Head of Communications at the Adam Smith Institute, Kate Andrews, spoke to Sky News George Osborne's upcoming Mansion House speech and his plan to announce a mandatory budget surplus in normal economic times.View video profile
What would a compulsory budget surplus mean? | Paul Mason explains
Critics say it’s a political trap for the opposition, Paul Mason explains George Osborne's plan to make balancing the books a legal requirement in the UK. Subscribe: http://www.youtube.com/channel4newsView video profile