Don't you love the enthusiasm of religious zealots. What concerns me is I thought it was customary to wait until someone had died and risen again before proclaiming his divinity.
As for these people's dismissing my 30 years of managerial experience in banking and as "knowing nothing about economics" I leave you to make up your own minds. Today I shall garner opinions from other experts to prove my case that deficit reduction is the only way to save the develped nations' economy from collapse.
We start with Vince Calble's 2010 Denning Ledcture.
Vince Cable is an economist who worked in the oil and finance industries before changing career and becoming a Liberal Democrat member of the UK Parliament in 1997. He is now Secretary for Business, Innoation and Skills in the coalition government.
The theme I set for myself today is an important one - arguably the most important as far as the immediate prospects for the UK economy is concerned. Can we reduce the deficit while still investing in helping the economy grow?
Answering that question means being clear about where growth comes from. And clear about the role of government in helping create it.
The short answer is that it is not only possible to do both, but that it is necessary to do both. Recovery cannot be assured when the government is running such an unsustainable budget deficit. But without growth it is difficult to see how the deficit can be managed down since growth generates tax revenue and gets people off the dole.
So what I want to do today is to set out why this balance matters so much, and to say something about how we intend to strike it. It will be the inevitable balancing act at the centre of the emergency budget in two weeks time, and indeed of every budget that this coalition produces, as both the Chancellor and the Prime Minister have made clear.
It is also a challenge that is central to the whole mandate of my department, the Department for Business, Innovation and Skills, which has responsibility for business, regulatory reform, trade, further and higher education and science. A remit that, as I said in my first speech as Secretary of State last week, makes it a de facto ministry for growth.
I want to challenge the myth today that there is a not a constructive and progressive way to tackle the deficit. Indeed, I want to argue that this is precisely what a progressive government should be doing. Along the way I will have something to say about the use - and abuse - of Keynesian economics.
I think it is right to approach this task of cutting both deficit and debt with a degree of radicalism. It is a mistake to believe that a positive and productive role for the state has to involve the last ditch defence of the current level and patterns of public spending. My argument today is that have an important chance to rethink some of what government does from scratch.
But we have also rejected the idea that all we need for private sector growth is to cut back the public sector.
Fixing the imbalances in the economy will take time. Between manufacturing and finance. Between North and South. Between dependence on public sector jobs and new private enterprise.
Regions long dependent on public sector employment will not become silicon valleys of entrepreneurialism over night. Businesses are still reeling from recession and are reluctant to invest or unable to raise finance.
Households are nervously rebuilding their balance sheets. We hope that exports will lift the economy; but demand in some major markets, notably the Eurozone, is weak.
For all these reasons private sector demand will, only with difficulty, fill the space created by cuts in public sector demand.
And no less importantly, some of what gives us the capacity to grow the economy actually comes from what we spend collectively on things like education, infrastructure and science. To undermine these would be like a farmer consuming next years' seed corn.This is a point I want to come back to at some length.
For all these reasons, we are rightly committed to advancing with care into a still uncertain economic future.
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The last government sometimes tried to present its record borrowing as an act of Keynesian heroism. In reality it was a short term expedient.
And in fact a substantial part of the deficit we have inherited was not a result of temporary stimulus or automatic stabilizers like unemployment assistance. It is structural. This means that even with returning growth, there would still be a fiscal hole to fill.
It is a long time since I studied and taught Keynes' General Theory - the economists' equivalent to the Bible - but I remember enough to feel extreme annoyance when Keynes's name is used to justify high levels of public spending and persistent deficit financing.
Keynes was, in fact, an economic and political liberal. And he was addressing some specific problems in the inter war period which could have presented themselves in the current crises but haven't, at least yet. The key point was the use of budget deficits when monetary policy fails to stop a downward deflationary spiral.
To be sure, Keynes would have approved of the highly expansionary monetary policy including quantitative easing that the UK has followed in this crisis so far. Helped by a big stimulus from devaluation.
And there is one other sense in which the so-called Keynesian critique of policy has force. Britain is part of a wider global economy. We have only 2% of global GDP and our exports in particular depend on developments elsewhere. If all major countries simultaneously embark on fiscal consolidation the cumulative effect on global demand is likely to be negative, and negative for Britain.
So there remains an obligation on countries with a stronger fiscal position to offset contraction elsewhere: Germany is the obvious case in Europe. But with our vulnerable fiscal position we are not in a strong position to preach from the bully pulpit.
However, having said that, Keynes would not have recognized much of what is now being called the Keynesian response to the recent and current crisis. In particular the structural element in the UK deficit which has nothing to do with Keynesian demand management and has to be dealt with.
What I mean by structural is this: the current level of public spending - and all the sense of entitlement built around it - is based on the revenues from an economy artificially boosted by a debt fuelled spending boom, an inflated housing market and a bloated banking sector. The position is unreal and unsustainable.
In the private sector the adjustment that deflated these bubbles was swift and brutal. The rapid contraction of retail - including the sudden disappearance of long-established names like Woolworths. The collapse of building many contractors.
But the public sector carried on growing. For a while, it could afford to. And in part that was based on an economic calculation that the public sector had to support the economy temporarily. Which it did.
But this could never last forever, and now the right thing is for it to plan an orderly return to solvency, rather than run the risk of a "Woolworths moment" in the public finances.
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( In fact at the Totonto G20 Summit (June 2010) we saw Barack Obama actually preaching from the bully pulpit Cable refers to when as leader of the world's biggest debtor and the President who presides over a loonytoons economic policy of unprecedented profligacy in demanding that nations fortunate enough to have run a surplus be willing to bail our his clueless, bankrupt administration. Naturally the surplus holding nations told him exactly where to go... )
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There is a simple, common-sense argument. Having a structural deficit is a little like using an overdraft to run expensive cars and dining out several times a week. And the overdraft has to be serviced. The public sector cannot be run in this basis. Either we need to earn more, or we change our spending levels and patterns.
We also have to recognise something that is generally true about the public sector. It has a tendency to grow through accretion rather than by design. A quango tacked on here. A program extended there.
It is a sobering fact that no government in the last thirty years has ever left behind it a state smaller as a proportion of GDP than it inherited, even if it has cut public spending in real terms for short periods.
It is not in any way to devalue the public sector or those who work in it to say that this is not a rational or wise way to run our country. We now have a window of opportunity for a genuine public debate about what government does - and just as importantly how it does it. We should not waste it.
This is exactly what I have asked my officials to do at the Department of Business. You can call it zero-based budgeting. So we don't just try to find savings by slicing away at existing structures.
And certainly not by simply cutting services at the point of delivery like reducing the quality of further and university education or our capacity for scientific research.
Instead, we ask: if we were designing this system from scratch, how would we do it? As a small step in this direction I have already identified more than £800million in savings at the Department of Business. I have set out plans to reduce the number of BIS quangos by a third over this parliament.
This is the same approach that Canada took in the 1990s, successfully turning a fiscal basket case into an economy that weathered the financial storm better than any other developed nation. And it didn't descend into anarchy or sacrifice its strong social model.
It means rejecting an ideological attitude to cutting back the state for a more pragmatic argument about what we want government to do and how.
It means asking if the private or voluntary sector could not do things as well. It means insisting that we don't defend the role of government by defending the size of government.
Of course at a human level we have to acknowledge that cutting public spending is going to mean people losing jobs in both private and public sector.
Experience shows the US trade deficit is a miracle of unmanageability, growing like Topsy, whatever happens to the USD's world value. The 1985 Plaza accord, a quite-heroic devaluation of around 40%, was soon explained away as 'not working' because of the J-curve. That is US exports increased in volume, but not in value. Imports, even if falling in volume, rose in unit price. During slump, which was not the situation in 1985, we could or might imagine that imports would fall so much in volume, that a hefty USD devaluation would beat the J-curve, and sharply trim the gargantuan trade deficit. Obama may shortly decide he has to take that bet.
The 70% fall in oil prices since their peak in midyear 2008 is certainly bringing down 'constant structure' US trade deficit numbers, but during recession or slump the economic structure changes. Any chance of US high-value, high-tech exports rapidly increasing is cancelled by the recession, leaving the agro-commodities, minerals, metals and other recession-hit goods, whose unit price has spiraled down over 12 months, to take the strain. In simpler terms, these are products with relatively inelastic global demand, unlike high-price goods and services. The problem is these basic exports are oil price-indexed, applying their own J-curve wipeout to any hopes for a quick rise in export revenues for the USA.
Another really simple credibility problem for engineering a fall in the US trade deficit is its sheer size. If the US exported all its manufacturing output, consuming none of it at home, this would not cover the present trade deficit ! As the Obama team already knows well, US monthly trade deficits are showing little if any 'oil benefit', exactly like trade deficits of nearly every other OECD country â€" even whole regions like the European Union 27, whose global trade deficit goes on rising.
The reasons are simple, but do not make good reading. Decades of delocalization and de-industrialization has stacked up unbeatable competition in almost any industrial activity, and increasingly in services from China, and quite soon Brazil, India and other big countries. Continued or increasing dependence on imported oil and other raw materials for the throughput, one-trip consumer society, even its 'postindustrial' culture crisis and desires for a green-clean future add to the Obama wisdom that the worst is still to come. Shrinking the world value of the dollar will do little to change these harsh real world facts and would surely raise inflation.
