Comments on: If Philip Hammond wants to reduce debt, he must draw a line under austerity https://neweconomics.opendemocracy.net/phillip-hammond-wants-reduce-debt-must-draw-line-austerity/?utm_source=rss&utm_medium=rss&utm_campaign=phillip-hammond-wants-reduce-debt-must-draw-line-austerity Tue, 11 Sep 2018 13:16:19 +0000 hourly 1 https://wordpress.org/?v=5.3.8 By: Ralph Musgrave https://neweconomics.opendemocracy.net/phillip-hammond-wants-reduce-debt-must-draw-line-austerity/#comment-776 Thu, 23 Nov 2017 12:27:00 +0000 https://www.opendemocracy.net/neweconomics/?p=1904#comment-776 Very interesting chart.

Re low interest rates being undesirable, there are obvious short term negatives from interest rate cuts, however Warren Mosler and Milton Friedman argued for a PERMANENT zero rate of interest. So long term, low or zero rates might be optimal.

I agree that the deficit and debt should never be a TARGET. Keynes said as much.

Re the idea (which I think is implicit in the article) that an increase in demand is possible, the economists charged with answering that question, the BoE MPC, think big increases in demand are just not possible due to inflation being above the 2% target.

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