from reading Larry Elliot and others it seems there is a real and significant risk of the world economy folding like a crap chair. one that's made of paper, in the rain.
a double dip is a worry, and what with the looming cuts too, it looks like Keynesianism is our best bet.
but our chancellor, Clueless George, has other ideas.
"Osborne's belief is that hacking away at public spending will create space for the private sector to flourish. Britain will cease to be so dependent on consumer spending and the state for its growth; instead, resources will shift to manufacturing and exports, thus reducing both household debt and the size of the UK's current account deficit.
Such an outcome is much to be desired but, as today's trade figures show, it remains a long way off. Far from benefiting from the 20% drop in sterling over the past three years, the trade gap in the three months to July was the worst on record. Only the efforts of the City, which boosted the UK's surplus in service sector trade, prevented an even worse outcome. Not much sign of rebalancing there."
i personally think his belief in crowding out is based more on ideological conviction than any fact. the private sector is weak, confidence is fragile. like a 16 year old virgin boy with acne trying to chat up a girl. that fragile. so pulling masses of money out of the economy in order to go on an ideological crusade is madness, utter madness. the deficit is too big, and that is Labour's fault. but ranting at the past won't solve the present, and making things worse is a hell of a risk in the hope of a better future, to say nothing of the consequenes (see Mr G. Howe in the 1980s)