This Guardian headline quoted by council leader Julian Bell is a lie two times over.
The lying Guardian headline writers have changed nuanced IMF statements such as:
… a slower pace of deficit reduction would be necessary were the economy to continue to expand less rapidly than expected …
IMF questions pace of cuts
Lie Number 1 is that the IMFâ€™s questioning is contingent on continued weak growth. They do not say that the time has come to loosen fiscal policy. Indeed Jorg Decressin, an IMF economist, said:
Policy should only be loosened if growth threatens to slow down substantially relative to what we are forecasting.
Lie Number 2 is that the Guardian has elided â€œdeficitâ€ and â€œcutâ€. There are two sides to deficit reduction. One side is what you spend (spending less, â€œcutsâ€). The other side is income (taxing more). We know from past IMF statements that their approach to slower deficit reduction would be to tax less NOT to spend more.
The reason for this is that you can turn on and off tax cuts way more easily than you can turn on and off spending increases. A temporary loosening of fiscal policy (tax and spend) would be much more credible on the tax side than the spending side of the deficit equation. The IMF have specifically recommended a temporary VAT cut. The IMF does not question the Coalitionâ€™s spending plans in any way.
The Guardian is lying. Is Bell ignorant or is he simply happy to repeat something he knows is a lie?