Britain can afford to live with high debt ‘forever’, says IMF – Telegraph

Olivier Blanchard, the International Monetary ...

Olivier Blanchard, the International Monetary Fund’s Economic Counsellor and Director of Research, during the World Economic Outlook (WEO) press conference, October 8, 2008 at the IMF Headquarters in Washington DC. (Photo credit: Wikipedia)

This is a must-read article from the Telegraph, citing latest research evidence from the IMF.

via Britain can afford to live with high debt ‘forever’, says IMF – Telegraph.

It looks like Oliver Blanchard, Chief Economist at the IMF is promoting his Keynesian values again. Originally, the high-priest of austerity, the IMF is now promoting the benefits of massive public sector investment in infrastructure – the cost at the margin is higher levels of national indebtedness. Watch out for big name economists to pile in to the debate (it will help sell their latest books).

Of course, these viewpoints are highly politically charged too. It puts the likes of UK Chancellor, George Osborne, on the back foot – critics will argue that Osborne’s austerity is politically motivated in favor of a smaller government.


The cult of home ownership is dangerous and damaging – Adam Posen –

Dr Alf's Blog

This is an excellent, MUST READ article by Adam Posen, president of the Peterson Institute for International Economics and is published in the FT.

via The cult of home ownership is dangerous and damaging –

The article highlights the risks at both the individual and national level of the home ownership cult, especially in the US and the UK.

These days, home ownership favors the wealthy and inherited wealth. The article cites latest research in the US that home ownership impacts mobility and aggravates unemployment. The financial crisis started in the US in 2008, and was triggered by sub-prime mortgages supporting home loans to the less advantaged. Now, once again, the big US banks are booming, and both the US and the UK governments are propping up the housing market.

Surely, the UK Government should be subsidizing language training rather than mortgage finance, and encouraging more people to go…

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