Economic conditions provide little scope for reducing deficits significantly further over the next year or two; indeed, premature fiscal tightening could put the recovery at risk.
Those were the words of Ben Bernanke, chairman of the US Federal Reserve, in a speech on 4 October. Bernanke is no dove on the deficit; he also happens to be one of the pre-eminent scholars of the Great Depression.
It might be worth remembering these words when George Osborne refers to the Labour front bench as a load of “deficit deniers” in about an hour’s time.
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