| Topic: | Re:Re:Lawless London | |
| Posted by: | Kathleen Healy | |
| Date/Time: | 03/05/26 13:32:00 |
| Austerity policies, introduced after the great global banking fraud, were justified by a study, Growth in a Time of Debt, by economists Carmen Reinhart and Kenneth Rogoff. It said that debt above 90% of GDP significantly slows economic growth. Osborne, the EU and other countries cited it in justifying austerity. It contradicted earlier Keynesian theory that government intervention was necessary when growth stalls to stabilise the economy and stimulate demand and growth. The study by Rhenihardt and Rogoff was not peer reviewed and the data it was based on not made available. Other Economists later obtained the data and found spreadsheet errors, which undermine the theory and which are now acknowledged by R and R. Since austerity, debt has grown from around 74% of GDP, low in historic terms, to 93%. It is now generally acknowledged that growth is the way to bring it down. How was such extreme policy adopted, based on a non peer reviewed paper with a spreadsheet error. There were alternate economic views at the time. They said the best way out of the debt, caused by bailing out the banks, which were at risk due to colossal fraud, was through growth, underpinned by gov't spending. These alternate voices were given less prominence. A recent study into BBC bias found that it was not politically biased, but is was criticised for economic bias. Reporting the Rhenhardt Roggoff view, used by Osborne to justify austerity, whilst not putting forward alternative views, was one of the examples. The whole mainstream media did it. It made it seems as though austerity was the best and only option. No one reported that the paper was non peer reviewed and the data it was based on wasn't available. One effect of the banking fraud, austerity and QE; or printing money which was given to banks, has been to increase asset values and accelerate an already growing wealth gap. The wealth of the top 10% has increased by 280% since 2008. The poorest 50% of people in the UK now own 5% of the wealth. In real terms what this looks like is food banks, homelessness, crime, insecurity, fear and support for populist politics. |