Chris Giles
speaker
229 appearances
10 recordings
1 series
first heard Apr 2011
last heard Jan 2015
Chris Giles’s voice in public audio — every appearance, attributed to the second.
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Appearances
So, for example, the Telegraph headline was... The Guardian reported it as... And the Mail reported it as... The FT's headline was...
The basic question is what is the effect of spending cuts, public spending cuts or tax increases?
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How much do they wipe out of the size of the economy?
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Because...
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We know for a fact that if you stop paying someone like Dibble, you sacked him a while back, that cuts his income, and then we don't know how much it cuts his spending, and does this then pass on from one person to the next?
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Someone's income falls, that cuts their spending, that means someone else's income falls, so actually for the economy it has a very big effect.
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Or does it really stop at Dibble, you cut his income,
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His spending falls a bit, but maybe not that much.
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He maybe gets another job and has very little knock-on impact.
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So the multiplier tells you how much the initial change in public spending or taxation affects the economy as a whole.
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Well, what they said was that previous estimates were too small.
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Previous estimates in most countries were about a half.
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That meant that for every £1 you cut public spending, the overall size of the economy fell by 50p.
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And they said, no, that's too small.
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And the numbers is somewhere between 0.7 and 1.7.
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If it's 1.7, that means for every pound you cut out of public spending, the size of the economy falls by £1.70.
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And therefore, that has a much bigger effect.
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And so if the IMF is right, then it means that austerity is going to be much more painful and might even be counterproductive.
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You might cut the size of the economy so much
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that ultimately debt and borrowing rises.
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Showing 121–140 of 229 · page 7 of 12
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