3 thoughts on “Not reducing debt is the greater danger”

  1. Posted 26/02/2010 at 11:20 | Permalink

    It does concern me that there is no credible plan for dealing with the UK’s public finances. Opinions may vary about whether government expenditure should actually be cut now, or whether any cuts should be delayed for a time. But not publishing a plan, with amounts and timescales, seems hard to defend. Of course the future is ‘uncertain’: what else is new?

    No defence review before the election. No spending review before the election. Apparently every attempt to shield the electorate from any inkling of the ‘difficult times’ that lie ahead: both spending cuts and tax increases. That is hardly responsible behaviour.

  2. Posted 26/02/2010 at 11:43 | Permalink

    The sixty economists present a false dichotomy – borrow or recession. The evidence is that in an open economy with a floating exchange rate you do not have to make that choice. What annoys me most about the 60 economists, Blanchflower and so on, is that they do not recognise that there might be a contrary opinion.

  3. Posted 02/03/2010 at 21:17 | Permalink

    I agree with Philip’s “false dichotomy” point, but he doesn’t tell us exactly how to maintain the stimulus while reducing the national debt. One way is to buy more of it back partially with printed money (inflationary effect) and money from tax (deflationary effect). Get the mix right and the effect is neutral, i.e. the government’s present reflationary stance remains unaltered. Or if you want, alter the mix a bit for a bit more reflation. More on this at: http://cutdebt.blogspot.com/

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