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Sunday, 23 November 2008

Andrew Haldenby: Fiscal stimulus will prolong the recession

Good article over at Conservativehome.

Excerpt: "In retrospect the UK has endured a long period of living beyond its means, supported by interest rates held far too low. We have become used to unsustainable levels of debt and consumption (we use the graphic image of the “obese economy”). We now need to find a new path based amongst other things on saving (remember that?). A fiscal stimulus would be the last hurrah of the debt-binge era. It’s time to move on. Instead the Chancellor should get a grip of public spending. That does not mean crisis cuts in public spending, which would increase inefficiency and – by creating a perception of under-funding – lead to demands for higher spending later on.

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