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Paul you are wrong about the public sector not creating any real money it does in a very big way to the private sectors.
The public sector sub contract a lot of its work out to private companys like transportation, building, cleaning, land scaping, private hospitals and other healthcare just to mention a few. They play a very big role in keeping some private companys in business which in turn keep people in jobs. The more cuts the councils have to deal with the less they will sub contract out to the private sector which has a knock on effect on the economy as a whole.
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