That well known dance move:
But after its experts visited Britain for their annual survey, the IMF also warned of “significant” risks that growth will remain feeble and unemployment “unacceptably high”.
Some economists have said that, if the economy does stall, Mr Osborne should be prepared to relax his programme of cuts to borrow more and spend more.
By contrast, the IMF said that in such a scenario, the economy should be stimulated with a combination of more “quantitative easing” from the Bank of England and “temporary tax cuts” for businesses and low-income households.
For before the IM turned up all were hoping that they would say there must be a Plan B. One which increased spending. Now the IM has indeed offered a Plan B, one which suggests cutting taxes, of course the IMF will revert to just being neo-liberal bastards who don\’t know their arse from their elbow.
The reaswon the IMF gives seems logical:
Tax cuts would be “faster to implement and more credibly temporary” than any move to increase public spending, it said.
Quite. It is much faster to cut, say, national insurance payments than it is to gear up Whitehall to spend more. And it\’s a great deal more easily reversed as well.
But it\’s the State having less money to spend which is why it\’ll be rejected even by those who insist that there should be more fiscal expansion. Despite the fact that Keynes himself supported exactly that, the reduction of payroll taxes as a method of fiscal expansion. No, really, he did.
One could watch the yardarm coming across on Comment Is Free during the press conference. A week or two back the IMF was a beacon of global coordination staffed with the finest economi minds in the world, and it was a shameful disgrace that Cameron had stymied McBroon’s angling for the top job. Within five minutes of it supporting Plan A it was a disgusting neo-con thinking shop stuffed with second rate economists from Chicago and Harvard, worthy of no further consideration.
Is it really more easily reversed than say a one-off payment of £300? In some ways they are quite similar, I realise, but in the US they haven’t managed to reverse temporary tax cuts for years now.
Well, that may be due to the fact that many hoped/thought that they would be “permanent”. Anyway, is a term of 8 years “temporary”?