Whoever emerges winner from the meatgrinder of the Tories’ leadership contest, it’s obvious who lost: George Osborne. The “long-term economic plan” of the once supremely powerful chancellor, fêted as Britain’s next prime minister, disintegrated inside a few years.
The plan rested on three planks. First, and critically, were the public spending cuts. These were justified by the century-old “Treasury View” of the public finances, in which spending must always expect to balance with tax revenues. Economically nonsensical, and rarely observed in practice—Britain has run a fiscal deficit in almost every year since the Second World War—this belief is…
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