A group of academics have dismissed Conservative government's plan to enshrine permanent budget surpluses in law as a political gimmick that ignores basic economics.
The academics said a law aw forcing the government to cut spending or raise taxes every year to generate a budget surplus, characterized as Micawber economics, would suck the economy dry and within a few years could trigger another credit crunch.
In a letter, 77 of the best-known academic economists, including French economist Thomas Piketty and Cambridge professor Ha-Joon Chang accused Chancellor George Osborne of turning a blind eye to the complexities of a 21st-century economy.
It came in response to chancellor's Mansion House speech earlier this week during which he said the government should be forced by law to bring down the UK’s debt mountain to protect the economy against future shocks.
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