The IMF have come out today with a report suggesting that Advanced Countries do not end financial stimulus (this is what our Prime Minister is addcited too, remember?) before 2011 for fear of causing a double dip recession.
No doubt the bullying left wing cheerleaders will say the Tories are wrong again. Where to start? Well firstly Dominique Strauss-Kahn who is the Frenchman who runs the IMF is a marxist and so will always think state spending is a good idea.
Secondly, George Osborne had a good phrase at the start of the crisis "You can't borrow your way out of a borrowing crisis." This is even more truwe today, even with sclerotic growth in the economy, piling up debts on top this shaky foundations is simply not the answer.
Thirdly, all this so called stimulus and Government spending is not economically beneficial. Quantitative Easing has been used to boost the bond and equity markets (good for those who foresaw this), which has bailed out the banks but done nothing to increase demand in the real economy. The Government spending on diversity counsellors, bullying hotlines and regional quangos' is of dubious value except to those who collect the paychecks. It would be much easier to scrap the lot of these jobs and then raise unemployment benefit by 80% of the savings made.
Finally, a double dip - where is the evidence in the UK that we have even exited recession? The UK is in a far worse position thanks to Labour overspending in the boom than France or Germany. We are simply not in a position to spend more of our children's money so frivolously.
So where do we get too? Well a sensible Chancellor would start cutting the fat off the public sector straight away, at least 5% a year for the next Parliament should do it. Quantitative Easing should not be re-started as it only piles up future losses. If the banks need more money they can raise it in the market like they did last year.