Which bunch of economists is right? Those who say cut public expenditure rapidly - or those who say do it less rapidly?
Richard Murphy provides an easy to understand case study - the likely consequences of rapid cutting are chilling. He says;
Give or take the public sector employs about 5 million people. If, as is demanded, there should be public sector cuts of 10% then maybe 500,000 people will lose their jobs.
People in work spend and pay tax and they don't need benefits - sacking someone on £25K creates a net loss to the Government of c.£20,000 - excluding the personal misery and any consequent costs of ill-health etc.
The net direct loss will be 500,000 x £20,000 - and the human misery incalculable (look at what is happening in and around Redcar right now).
Richard Murphy's article is a 'must read' - click HERE
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