THE appeal of Jeremy Corbyn, the likely Labour party leader, is said to be that he offers an alternative to austerity. Indeed his rise has been championed by Keynesians such as Paul Krugman. And there is plenty of scope for arguing about whether the British government has placed too much emphasis on deficit-cutting in recent years.
But is that what he is really offering? One of his key supporters, John McDonnell, wrote in the Guardian this week that
Labour under Jeremy Corbyn is committed to eliminating the deficit and creating an economy in which we live within our means.
The Keynesian approach would be to allow economic growth to bring the deficit down gradually, via higher tax revenues and lower benefit spending (as unemployment fell). Instead Mr McDonnell says
Our cuts will be to the subsidies paid to landlords milking the housing benefit system, to the £93 billion in subsidies to corporations, and to employers exploiting workers with low wages and leaving the rest of us to...Continue reading
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