When better to listen to the confession of utter economic failure of former British Prime Minister James Callaghan than the thirtieth anniversary of his bankrupt Premiership being swept from power by Margaret Thatcher in the wake of Britain’s 1979 Winter of Discontent – “discontent” and economic disaster that Callaghan’s Keynesianism did so much to bring about – and just before our own finance minister sets about writing his Budget. Said Callaghan to his party’s conference:
“ We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. . . ”
Call it budget advice from a bankrupt Prime Minister.