3 responses to “Muddled Thinking watch #4: “British economy too reliant on people spending money” Christine Lagarde IMF!

  1. This is all down to supply-side rhetoric. The usual Says Law nonsense that suggests you have to produce first if you want to consume.

    It is of course nonsense in a monetary economy, where what gets produced first is money! By banks.

    And if your private sector wants to save, or your external sector wants to save (i.e. importing), then there is only one place those savings can go, and that means government *must* be the borrower of last resort – assuming you want to avoid GDP collapsing Greek style.

  2. Good post. What you write all sounds very logical and its hard to disagree with. I just wonder if the people who push the same line as the IMF actually believe what they are saying?

  3. The phrase came from the headline. One thing you have to keep in mind is that the author of a newspaper article does not do the headline, that is done by an editor. Those editors are only interested in getting you to read the article, and not any form of factual accuracy.

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