McDonnell was right – borrowing for investment does pay for itself

SKWAWKBOX

Channel 4’s FactCheck recently published an article claiming Shadow Chancellor John McDonnell was wrong to say that Labour’s plans to borrow for infrastructure investment would pay for themselves. Other economists disagree.

Reposted with permission from Socialist Economic Bulletin:

The manufactured furore surrounding John McDonnell in the wake of the Budget has a clear purpose. It is designed to distract attention from probably the grimmest set of forecasts delivered in a Budget in the modern era and to deflect criticism from the Tory government.

This is not solely an anti-Labour, pro-Tory propaganda campaign. Contrary to widespread assertions, austerity is not coming to an end and is being deepened. Seven years of falling living standards are not over. The Institute for Fiscal Studies (IFS), very far from being a left-wing thinktank, says that living standards will be lower in 2023 than they were in 2008.

This is a doubling down on…

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