More on the Cuts

The internet is a rich source of blogs written by economists when they should probably be doing some work.

I'm keen on blogs by intelligent economists that argue against the current general public's sympathy for the need for efficiency savings, massive deficit reduction and a reduction in the size of the state on the grounds that the Tories made the arguments. So I enjoyed this morning reading a blog called Stumbling and Mumbling.

From three days ago, a post on Nick Clegg's abandonment of his previous position in favour of the Tory line, and his clear confusion on the subject. It does seem a shame that Clegg can't just say: Yep, we had to give in on this one in the interests of the coalition holding together, but instead has to put on this really rather sad show that he really now thinks this is necessary. As the blog post makes clear, his position is pretty weak at best.

From two days ago, a comment on the actual cuts, making use of some of the microeconomics learnt in econ101a as well as thinking about the macro scale of things learnt in econ101b.

How exactly is the big boss (Osborne) going to know where the inefficiencies are? It's in the interests of those that profit from the inefficiencies to hide them in any large institution (and the public sector at millions of workers is pretty huge!). As a result, Osborne couldn't really identify many efficiency savings and so has just done what was long expected, and cut anyway.