In Friday’s FT, more than 60 leading economists back the decision of Alistair Darling, UK finance minister, to delay spending cuts until 2011. In two letters, they argue that (1) a sharp shock now would be dangerous; and (2) the first priority must be to restore robust growth.
Rachel Lomax, Lord Skidelsky, Brad DeLong and Joseph Stiglitz are among those to have co-signed the letters.
Yet only last weekend, 20 economists (including Ken Rogoff, Anne Sibert and Sir Howard Davies) wrote to the Sunday Times supporting the Conservative party’s argument that fiscal tightening should start this year.
The series of letters reveals a sharp dividing line on the crucial general election issue of how to tackle the UK’s huge public debt.
What do you think? Should the UK slash public spending now? Add your comments below. And watch the video below for Martin Wolf’s views.
