This brought the apt riposte from Marshall Auerback of the New Deal 2.0 thinktank. \”So we\’re supposed to ratchet up government spending when the economy is growing? When it can present genuine inflationary dangers? If this is the type of policy incoherence we have in store, then God help the United Kingdom.\”
That is of course what El Gordo did and that is, of course, why we seem to be facing debt constraints on what we can do about the recession. Coming off the top of a decade and a half\’s worth of boom we should not only not have been running a budget deficit we should have been running a large budget surplus.
That is what Mr. Keynes would have recommended, is it not?
And if we had been then we wouldn\’t be facing the worry of a runaway debt trap if we expanded fiscally now.
I do think it\’s quite gorgeous to accuse the current government of exactly the mistake that the last one made……