There is a query underlying the collapse of the British Prime Minister Liz Truss. Does this signal that the tax cut zombie period is finally coming to an end if her insistence on significant tax cuts doomed her?
There has been no doubt for years that tax cuts do not contribute significantly to economic development. However, Republican politicians in the US kept pursuing it because it was a notion that wouldn’t go away. Even a book titled “Zombie Economics” was written on the subject by an economist.
Liz Truss and Kwasi Kwarteng, her first Chancellor of the Exchequer, accepted the tax cut idea and promoted it over the summer during the Tory Party leadership campaign. They were successful in winning, which is good so far, and they put their platform into practice. The British economy was initially hit hard by high interest rates and a decline in the value of the pound. Truss’ polling results plummeted, and she soon changed her position. But this simply made her supporters question whether they should continue to back her. Everyone lost faith in her, and the outcome was obvious.
