Speaking at a conference on September 28th
he concluded: "Overall, I therefore do not think that economies can grow or inflate away the debt with the ease to which they may have done so in the past. This leaves the third mechanism, primary surpluses, as the only way in which debts can be reduced. Primary surpluses can be achieved either by reducing spending or by raising taxes. While economic research suggests that fiscal stabilisation efforts that rely on expenditure cuts are more likely to be successful than those that rely on revenue increases, precisely how the necessary budget surpluses are achieved is entirely a matter for elected parliaments to decide since fiscal policy has large redistributional effects. My point here is simply that debts must be reduced through budgetary surpluses since the other avenues for debt reduction are closed."