BBC SPINS KING

This blog post (below) is the sort of leftist thinking that gets porn stars elected to safe family Democrat seats never mind win marginals in Edinburgh for Labour this year, Its a great piece of Keynesian exposition, thats for sure and if you are 'completing' in Economics this year and need an essay on New-Keynesianism than this could be it. But read the exposition, this kind of thinking is futurist nuts I think; pure fantasy!

UK savings rise as an exact counterpart of government deficit

Keynes hung around with writers and painters creative types, his 1930s futirist visions & the following 1970s neo-Keynesian babble of balanced growth & automatic stabilisers etc (the perfect 'New Town' planned vision of the 60s barracades!!) is all nonsense. "We are all monetarists now" 9of one sort), if you are not then you are in a fringe group!  "The chap in the frivolous hat, looking as if he's considering nothing more taxing than replanting the herbaceous border and possibly lunch, is the great economist John Maynard Keynes - painted in 1917 by his lover, Duncan Grant." THE GUARDIAN

John Maynard Keynes

EXAMPLE OF NEO-KEYNESIAN 1970s CAMBRIDGE THINKING

QUOTATION / EXTRACT FROM REFERENCE (ABOVE

The journalistic spin is summed up by "Mr King's remarks may have been aimed as much at number 10 Downing Street, as number 11" and in a pre-election climate there are those who would love to read the bank of England as favouring a change of government? See last para. http://news.bbc.co.uk/1/hi/uk/8469373.stm The journalist's implied view is that King was saying a higher savings rate is hindered by the government's deficit. But, to a trained economist, that makes no sense. Savings always rises and falls in exact proportion to GDP as government deficit rises and falls; they are national income accounting counterparts!

The quote "a key element in raising the national saving rate is the elimination over time of the structural deficit in the public finances". This states what is a factor, not what direction it is working in. UK savings rise as an exact counterpart of government deficit has been rising for many months in the same period as the budget deficit, and since Sept.08 to Nov. 09 (last published data), all UK sterling savings rose 10% and bank deposits by 50%. See http://www.bankofengland.co.uk/statistics/ms/2009/dec/bankstats_full.pdf Table B1.2 The quote, "But uncertainty about how and when fiscal policy will respond has a direct bearing on monetary policy. And markets can be unforgiving" is also cited loosely without direct comment or explanation, leaving it like a hanging chard as if implying political criticism. But as everyone should know uncertainty in monetary and to a lesser extent fiscal policy in their details are normal and necessary.