Public spending again: David Blanchflower slates George Osborne
We love David Blanchflower on this site and were singing his praises when everyone else thought he was nuts. Now he has stepped in to the cuts row with a scathing attack on George Osborne in The New Statesman. It’s really not turning out to be a good day for Slasher. This is Blanchflower’s view:
“The time for cutting public spending is not now, not next year and not the year after… Unemployment is going to continue to rise this year and may keep on rising … If spending cuts are made too early and the monetary and fiscal stimuli are withdrawn, unemployment could easily reach four million If large numbers of public sector workers, perhaps as many as a million, are made redundant and there are substantial cuts in public spending in 2010, as proposed by some in the Conservative Party, five million unemployed or more is not inconceivable. They could be our lost generation …
It is not hard to work out that, with unemployment rising fast, it isn’t the right time to cut public sector jobs, wages or public spending for that matter. Mr Osborne, I really don’t know which economists are advising you on this brilliant strategy to increase unemployment, but feel free to give me a call.
We must not repeat the mistakes of the 1930s by assuming a recovery is taking place and then cutting spending and raising interest rates too early. Such action could push the economy into a decade-long depression.”