New fiscal rule - get borrowing down

David Smith is on excellent form in the Sunday Times today. The old fiscal rules launched in 1997 by an emboldened Chancellor which tried to put in place limits on government borrowing and debt have been blown into the water in the last couple of years. The likely figures for public sector borrowing are quite staggering and the impact will be felt for many years to come. Either state spending has to fall and/or tax revenues have to rise. Given the likely weakness of any economic recovery, we cannot rely on a high enough flow of extra tax income to bring borrowing down - government spending must be cut, and in the labour intensive world of public sector services and administration it can only be through reducing the wage bill that deep cuts can be achieved. “One way or another the public sector’s £158 billion salary bill has to be frozen or reduced. The more public-sector workers resist pay freezes, let alone reductions, the more that burden will fall on jobs.”

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Unit 2 Macro: Cyclical and Structural Economic Issues Facing the UK [23 May 2012]
Unit 2 Macro: Migration and the UK Economy [20 May 2012]
Unit 2 Macro: The Output Gap [20 May 2012]
Unit 1 Micro: Economics of a Minimum Wage [12 May 2012]
Unit 3 Micro: The Dawn of a Shareholder Spring? [8 May 2012]
Unit 2 Macro: Monetary Policy and Inflation Glossary [5 May 2012]
Unit 2 Macro: Fiscal Policy Glossary [5 May 2012]
Macro Revision - Key Statistics on the UK Economy [4 May 2012]
Robert Schiller - Finance and the Good Society [1 May 2012]
Macro Revision: Putting Things in Context [29 Apr 2012]
Unit 2 Macro: Britain back in Recession [29 Apr 2012]
Unit 4 Macro: The Euro Zone Crisis (Revision) [22 Apr 2012]
Unit 1 Micro: Adecco and Monopsony Power [22 Apr 2012]
Unit 1 Micro: The Tax on Beer [16 Mar 2012]
Unit 4 Macro: Video Resources on the Euro Crisis [10 Mar 2012]
Unit 1 Micro: Highest and Lowest Paid Jobs in the UK [26 Feb 2012]
Unit 3 Micro: Low Pay in Supermarkets [24 Feb 2012]
Unit 4 Macro: King on the UK Economy [15 Feb 2012]
Unit 1 Micro: Public Goods [11 Feb 2012]
Martin Wolf on Global Shocks [10 Feb 2012]
Trucks are the new way of measuring debt [1 Feb 2012]
Unit 2 Macro: Growth and Development - Some Indicators [30 Jan 2012]
Unit 1 Micro: Can the UK Computer Games Industry Grow [24 Jan 2012]
France and Flexible Employment [22 Jan 2012]
Unit1 Micro: Can a minimum wage create jobs? [16 Jan 2012]
Unit 4 Macro: France loses her AAA credit rating [15 Jan 2012]
Unit 4 Macro: Economics of Fiscal Deficit Reduction [12 Jan 2012]
Unit 4 Macro: UK Bond Yields Reach Record Lows [11 Jan 2012]
Economics at the Movies - Freakonomics [9 Jan 2012]
2011 in Review - The US Economy [27 Dec 2011]
Unit 2 Macro: The UK Housing Market in 2011 [26 Dec 2011]
The Eurozone Crisis Explained (again!) [22 Dec 2011]
Behavioural Economics: Herd Behaviour [28 Nov 2011]
Unit 2 Macro: Should the EU introduce a Tobin Tax? [14 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Eurozone crisis - a selection of resources [12 Nov 2011]
Unit 3 Micro: Time of Use Pricing for Energy [2 Nov 2011]
Unit 4 Macro: Should TNCs make full disclosure on factory wages? [30 Oct 2011]
Unit 3 Micro: UK Executive Pay - All in it Together? [29 Oct 2011]
Unit 3 Micro: Drop Box and Freemium [18 Oct 2011]
Can the “invisible hand” solve Africa’s poverty? [13 Oct 2011]
Unit 4 Macro: Unit Labour Costs and Inflation [12 Oct 2011]
Skidelsky in Madrid [12 Oct 2011]
Unit 3 Micro: Monospony Power and Low Wages in Care Homes [3 Oct 2011]
Unit 3 Micro: Tube Drivers set to earn £50,000 a year [3 Oct 2011]
NMW: Classical real-wage unemployment [3 Oct 2011]
Greek debt decision tree [25 Sep 2011]
Unit 4 Macro: Greek Economy at Default’s Door [25 Sep 2011]
Unit 4 Macro: IMF Flags up Risks of Double Dip [20 Sep 2011]
Unit 2 Macro: Economic Growth and Inequality [14 Sep 2011]
Unit 2 Macro: Income and Wealth in the UK [12 Sep 2011]
50% tax rates - Chuck it George [7 Sep 2011]
Unit 4 Macro: Dangers of High Inflation [11 Jul 2011]
Unit 3 Micro: Oligopsony - Dairy Losses Drive Farmers from the Fields [10 Jul 2011]
AQA ECON4 Context [20 Jun 2011]
A2 Macro: Consumer Spending [30 May 2011]
AS Macro Key Term: Deflation [24 May 2011]
AS Macro Key Term: Cost Push Inflation [24 May 2011]
AS Macro Key Term: Inflation [24 May 2011]
A2 Micro: High and Low Marginal Cost Products [19 May 2011]
A2 Micro: Ownership and Control in Modern Businesses [18 May 2011]
EU Economics: Comparing the UK with Europe [14 May 2011]
AS Macro: Extended House Price Deflation? [5 May 2011]
A2 Macro: Chinese investment in the EU [3 May 2011]
AS and A2 Macro Revision: Keynesian Economics [28 Apr 2011]
Focus on Ireland’s Economy [12 Apr 2011]
A2 Macro: Back to Roubini - a Year On! [11 Apr 2011]
AS Macro Key Term: Real Disposable Income [11 Apr 2011]
OCR F585 June 2011: Euro Area on the Rocks? [11 Apr 2011]
UK Minimum Wage rises by 2.5% in October 2011 [8 Apr 2011]
EU Economics - Portugal Reaches for Bail Out [6 Apr 2011]
AS Macro Key Term: Fiscal Austerity [6 Apr 2011]
AS Macro Key Term: Fiscal Deficit [3 Apr 2011]
Information Failures: Tesco and Second Hand Cars [3 Apr 2011]
OCR F585 June 2011: Data Charts (2) [30 Mar 2011]
Keeping Track of UK Macro Objectives [18 Mar 2011]
Focus on Spain [16 Mar 2011]
Focus on Japan - Human Catastrophe, Economic Risks [13 Mar 2011]
EU Economics: How far is the Eurozone away from being an OCA? [12 Mar 2011]
Dambisa Moyo - How the West was Lost [11 Mar 2011]
Ireland - Mass Unemployment and Shrinking GDP [10 Mar 2011]
EU Economics - Life at the jagged edge of the Euro Zone [20 Feb 2011]
Combining monetary and fiscal policy to curb inflation in China [16 Feb 2011]
Challenges facing the London Economy [12 Feb 2011]
Shareholder activism at Thomas Cook [12 Feb 2011]
Migrants’ Transfers and the Balance of Payments [11 Feb 2011]
Mo Tanweer on Global Currency Wars [10 Feb 2011]
David Smith on Shifting Sands in the Global Economy [8 Feb 2011]
How Much Do I Earn? [1 Feb 2011]
Economics Q&A: Will the rise in VAT harm the UK’s economic performance? [17 Jan 2011]
Will we have to live with high unemployment? [17 Jan 2011]
EU Economics: Is 2011 the year the euro will fall? [9 Jan 2011]
Economics Q&A: Will the Government spending cuts affect inflation? [3 Jan 2011]
Economics Q&A: Why might Europe’s weaker economies struggle to grow in the next few years? [2 Jan 2011]
Revision: Consequences of Unemployment [1 Jan 2011]
Heinz Means Strikes [29 Dec 2010]
Beijing City lifts their minimum wage by 21% [29 Dec 2010]
EU Economics: EU Economy in Charts Jan 2011 [29 Dec 2010]
EU Economics: Estonia joins the Euro [27 Dec 2010]
EU Economics: European Fiscal Austerity Measures [24 Dec 2010]

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