Liz Truss: an economist explains what she got wrong (and what she’s actually right about)

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Busy promoting her new memoir, she has dismissed anyone who blames her for crashing the UK economy as “stupid or malevolent”.

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Provider:

The Conversation

URL:

https://theconversation.com/liz-truss-an-economist-explains-what-she-got-wrong-and-what-shes-actually-right-about-228065

Retrieved on:

Friday, April 19, 2024

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Tags:

Labour Party, Pension, Risk, Shock, Education, Bank, Policy, OBR, River, Panic, Public sector, Bank of England, Government, Instability, Economics, Sewage

Geotags:

EU, ENGLAND, UK, US

Summary

Key Points:

Busy promoting her new memoir, she has dismissed anyone who blames her for crashing the UK economy as “stupid or malevolent”.
But Truss knew the institutional context she was working in, and everything that happened after the mini-budget was entirely predictable.
She made a big mistake that affected millions of ordinary people, and has only herself to blame.
For while these constraints are generally beneficial to the economy, they also make it almost impossible to develop a radical agenda.
And, in a country suffering from massive underinvestment in the public sector, there may be a case for greater flexibility.

Fiscal frustration

But fiscal targets have their problems too.
And thanks to fiscal targets, subsequent governments have repeatedly cut investment in infrastructure.
The Labour Party has already said it will not make ambitious spending plans which might risk the credibility of its fiscal policy should it win the next election.
Yet fiscal credibility and major investment are not mutually exclusive everywhere.

Renaud Foucart does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.