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Eminent economists denounce Osborne’s budget surplus plan

In a letter coordinated by Class and signed by 79 leading economists government, plans for a new law that would force the Treasury to run a surplus in “normal times” was denounced as having no "basis in economics". 

The law would constrain the state's capacity to intervene in the economy and could risk a liquidity crisis that could also trigger banking problems, a fall in GDP, a crash, or all three.

Osborne had hoped that a definition of the "normal times" during which a budget surplus would be achieved would be set by the OBR, but in a further dent to the chancllors plans, the body said it would be up to parliament to clarify this threshold.

You can read more about the plans here and read Class' response here.

Work areas: Economy and Industry. Tags: austerity.