Source: www.libdemvoice.org - Friday, April 10, 2015 View image | gettyimages.com In recent discussions of deficit reduction my ear was caught by a survey or economists, organised by the Centre for Macroeconomics and the a press release from the National Institute for Economics and Social Research , both suggesting that austerity had not helped growth, and the Office for Budget Responsibility being quoted as saying that cuts reduced growth by one percentage point in each of the first two years of the coalition and by five percentage points over its lifetime. The subtlety lies in a quote from Charlie Bean, former Deputy Governor of the Bank of England, that the main purpose of the austerity programme was to stabilise the banking system. The banking system is vital to any country. Soon after Syriza was elected in Greece and announced an end to austerity I heard a rumour that some Greek government bonds had hit 15% interest: as government bonds are usually the at the bottom end of the range of interest rates in an economy that would point to scarily high borrowing costs for everyone. Banking is a major part of the British economy, which makes us even more vulnerable to the effects of an excessive deficit. That means it clearly makes sense to balance the budget. But economists suggesting that the austerity programme has harmed growth point out the other side of this. Publicly the Liberal Democrat policy on the deficit sounds like a compromise between brutal cuts from the Tories and recAll Related
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