Borrow, spend and print more money is obviously going to result in better short term economic figures, but where will borrowing and spending get us in the long term? The lesson for the next generation so far is clear, borrow and spend, don't be sensible with your money and the system will favour you.

Recovering from a major financial crash and three decades of irresponsible government spending was always going to take a long time. Whatever this government does, there's no way that any policymakers can cure the patient's disease in the short term. At best, they can reduce the fever, but if they make the wrong moves, the fever will only get progressively worse. The underlying UK economic problem is there is very little wealth creation. Successive UK governments thought they could remove manufacturing and replace it with cheap far eastern imports. The economy would survive of the financial service industries. That’s all well and good for Chinese capitalist and importers and warehouse owners but disastrous for the school leaver and the unemployed. The only answer is to invest again in manufacturing to increase job opportunities and exports. If the Germans can produce quality goods at a competitive price that sell in overseas markets, why can't British companies? The problem is our manufactures obsession with quality not quantity, we need and can have both. The role of the state is to facilitate business and provide and maintain infrastructure. Not to become a job creators in its own right. We need a vibrate and competitive private sector in order to afford our public services. The previous Labour government’s near total disregard for manufacturing, combined with its featherbedding of a grotesquely bloated public sector nearly brought this country to the point of bankruptcies. Before we start the blame game and point the accusing finger. Where is the lefts economic alterative to responsible government? What would Labour be doing differently? Those within the Labour party who call for more government borrowing and an end to responsible government, those that call for a massive increase in the government payroll, are deluding themselves. When the treasure chest in empty a more imaginative and innovative ways are required to stimulate grow: tax and squander are no longer an option.

Oh David.

"He inherited an economy for Alastair Darling that grew by 3.1 per cent "
Yet again... you know what Im going to say ... yet again you omit that tiny little detail of the £600Bn that the last government borrowed to pay for growth and votes. And the tiny little detail of the enormous structural deficit which underpinned the fiscal expansion.

Today is the time to do three things:
1. Raise VAT to 22.5 per cent. Hypothicate the money progressively to reducing the cost of labor (reduce PAYE and NI for the least well paid. Cut corporation tax as we have been so slow at this the rest of the World is overtaking us on CT rate cuts). This will create jobs and enhance the UK's appauling fiscal multiplier. An indirect benefit will be that the stimulus of funding the deficit will be more efficient i.e. it will reduce the structural element of the deficit.

2. Cut National Insurance on anyone under 25 to zero for two years. = YEP. I'm with you.

3. Announce a program of £50bn of infrastructure spending on shovel ready projects. Local authorities can bid for the money for any project already through the planning process. The Monetary Policy Committee can fund it via Quantitative Easing. YEP. I'm with you. QE will reduce sterling and improve the relative competitiveness of labor.

The 5% differential in VAT of a rise is substantiall and the cash collected would allow more rapid and more substantil in roads into taking people out of the tax system altogether. It would penalise imports and give relative advantage to exports : i.e. a VAT rise would create more jobs compared to a VAT cut.

If QE is injected into the ecomony, higher VAT is needed to mitigate asset inflation (this is complicated to ecplain but you understand)

I dont accept your proposition that a VAT cut would create as beneficial a stimulus as using the money to reduce labor costs instead. Cutting workforce jobs would both redistribute wealth and extend demand for UK labor. i.e. Cutting VAT will destroy jobs in the medium term because it encourages imports. We saw from the last VAT cut that it did not work - the outcomes was as I describe it.

Quite.

It would be interesting to know what does David Blancflower thinks will happen within the Eurozone. Another article pelase.

So much for the mess they inherited from Labour. The opposite is true. They inherited a recovering economy and promptly stuck the boot into it.