The New Statesman's "Plan B" suggestions to George Osborne would be a manifesto for economic ruin
By Matthew Barrett
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The New Statesman magazine has a big economic story in this week's edition, which seeks to suggest a Plan B for George Osborne. The NS' Alice Gribbin writes: "nine of the world's leading economists -- including a Nobel prize winner, one of the Chancellor's own advisers and three former members of the Monetary Policy Committee (MPC) -- write open letters to the Chancellor, George Osborne, urging him to adopt alternative and radical policies to stimulate growth and create jobs."
Let's see what they propose:
- Christopher Pissarides: "Cutting VAT back to 17.5 per cent, or reducing National Insurance contributions for those on low incomes, will revive job creation and reduce unemployment. "
- Sushil Wadhwani: "One good place to start is with the textbook example of printing money to finance consumption - sending every adult in the country a voucher that can be spent in the next three months."
- Jeffrey Sachs (an advisor to George Osborne): "I am strongly supporting the call for a Financial Transactions Tax, or FTT, which I believe would add efficiency to the global financial system by reducing destabilising speculation."
- David Blanchflower: "I suggest you increase the number of university places by 100,000 at once - the universities have a capacity. You could even insist that the extra places be primarily in science and engineering, which would help future growth. Second, give a tax holiday for two years on employer and employee National Insurance contributions for anyone under the age of 25."
- Lord Skidelsky: "We need a proper national investment bank, with more capital and the ability to raise private money ... You should use part of the proceeds of the sale of government shares in bailed-out banks to increase the capitalisation of the national investment bank."
- Jonathan Portes: "...reverse the damaging restrictions the government has introduced on skilled immigrants and students from outside the European Union."
- Ann Pettifor: "We need public works programmes that will mobilise a "carbon army" of "green-collar workers" and offer major incentive to environmentally friendly businesses."
- George Magnus: "The Bank of England could get involved in direct lending to SMEs and to the government, so that the latter could fund infrastructure and other programmes to boost employment."
- Christopher Allsopp: "My preference would be public investment for infrastructure, which is sorely needed and could be financed, currently, at negative real interest rates. How about a recovery fund, financed by index-linked gilts?"
This doesn't read like a series of proposals that could form the basis of a "Plan B" - a Keynesian alternative. They read like a manifesto for economic ruin, based on more borrowing in order to fund wasteful spending and utopian schemes, while punishing Britain's banking industry.