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Richard Layard explains the Manifesto for Economic Sense

Many economists believe that the austerity-first strategy currently pursued by EZ leaders is self-defeating. In this column, Richard Layard introduces a Manifesto for Economic Sense and invites economists across the world to add their name to it.

You may have seen the "Manifesto for Economic Sense" which Paul Krugman and I are promoting.1 Our aim is to generate a movement of economists who speak out against policies they know to be wrong. In the end, as we know, it is ideas that rule, and I have been shocked by the ideas that now rule, even inside the heads of my tennis friends.

Over and over we hear mantras such as, "you can’t cure debt with debt"; as if the main objective was to cure debt rather than unemployment. The more excusable error you hear over and over is, "we can only get growth by reducing the deficit".

That is the basic fallacy we have to contend with – the argument that growth requires confidence and confidence requires austerity. We need to constantly parade the evidence that austerity is bad for growth. Public opinion does matter and I feel guilty that, like so many economists, I have done little or nothing to refute in public the errors which are inflicting so much suffering on people.

So the aim of the manifesto is to lay out a rational position which thousands of economists can broadly subscribe to and promote. The first step is to ask you to please go to www.manifestoforeconomicsense.org and register your support. Do encourage your colleagues and others to do the same, and please also add your comments. But much more importantly: more of us should be out there arguing our cause in public. The manifesto is downloadable, so do feel free to use it in whichever way helps.

We must move the debate from the recitation of mantras to the presentation of rational argument based on evidence. Please help in any way you can.

1 For example, we had an OpEd piece in the Financial Times (28 June 2012) and Paul covered it on his blog.

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