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Joshua Mellors

By Joshua Mellors

If large portions of your population suddenly emigrate, or suicide rates markedly increase, it may be time for a policy rethink.

Image courtesy of Occupy Las Vegas

The West’s global financial crisis and the disastrous economic policies which have accompanied it have had a profound impact on Western populations. Indeed, financial crime and economic policy have been shown to be matters of life and death, literally.

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By Joshua Mellors

The recent article by Antoine Cerisier and Marc Morgan offered a sobering economic and historical perspective on austerity to counter the zealous fervour for such ‘financial bloodletting’ that has dominated public discourse for the past few years. Their debunking of the false analogy between economies and households – a favoured rhetorical set piece of figures like Ben Bernanke, Angela Merkel and George Osborne – is one of the clearest I’ve yet to see.

“America needs to get its fiscal house in order”

In response to the hysteria over the evils of government deficits, however, we could perhaps adopt an even more simplistic critique. We can begin by pointing out that a government deficit is necessarily exactly equal to the private sector’s surplus, or net savings. This means that the opposite is also true; a government surplus drains resources from the private sector (households, firms) and hence forces it into debt. Yet this is exactly what austerians the world over are calling for through increased taxes (on labour) and reduced government spending.

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