But Where Will the Money Come From? Q&A with Ann Pettifor
Public debt has been a core theme in political discussion since 2010. We've been told we can't afford to spend on public services and infrastructure because our national debt is too high; that we've maxed out our credit card and shouldn't saddle future generations with debt; and that if political parties don't focus on bringing down the national debt, they are irresponsible.
But how much of this is true? We asked leading economist Ann Pettifor to break down what's wrong with these narratives, and where the money for investment could come from.
Q1: Why shouldn't we be focused on the budget deficit?
A: Focusing on the budget deficit is like looking at the problem of the economy through the wrong end of the telescope. We should be focused on how we create a healthy economy with a high rate of employment - not how we should bring down the deficit.
Q2: Why do we need public investment now?
A: We need public investment now because private investment is still weak.
Q3: What's the best way to bring down the budget deficit?
A: The best way to bring down the budget deficit is by stimulating secure, well paid employment in order to generate more tax revenues.
Q4: If we don't tackle the deficit, won't we saddle future generations with debt?
A: No. We will saddle future generations with debt if we have a weak economy. In fact, right now we will miss an opportunity if we don't borrow, as current interests rates are historically low.
Q5: Where's the historic evidence in support of public investment?
A: The post-war period is a good example of a period when debt went down because the focus was on economic growth and employment.