The clamour for urgent and punitive cuts in public spending is growing louder. In a letter to the Sunday Times of 14 February, 20 "eminent" economists called for a "credible medium-term fiscal consolidation plan" based largely on "reductions in government spending", arguing that "there is a compelling case, all else being equal, for the first measures beginning to take effect in the 2010-11 fiscal year". Virgin's boss, Richard Branson, added his voice to the chatter a couple of days later, stating that the £178bn Budget deficit was "a serious risk" to Britain's economic recovery. The next government, he said, "must not put off those tough decisions [on cuts] to next year".

Branson can safely be ignored. He is a billionaire businessman who, as Rupert Murdoch does, moves with political fashion. His switch from New Labour to the Tories was inevitable. But the 20 economists include the former deputy governor of the Bank of England Howard Davies, the former Treasury permanent secretary Andrew Turnbull and the Labour peer Meghnad Desai. They cannot be so easily dismissed and, although they claim to be non-partisan, their letter has to be seen as a powerful endorsement of the Conservatives' position and an attack on the government.

The Tory shadow chancellor, George Osborne, was quick to claim that the publication of the letter was "a decisive moment" in the run-up to the general election. "We now have a consensus of economic opinion, aligned with the Conservatives, saying that dealing with the deficit is essential to create jobs and sustain the recovery," he said gleefully on the Today programme.

“Consensus of economic opinion"? First, it is worth noting that the economists who signed the letter seem unsure and even unclear about how their advice would be implemented. They call for the elimination of the structural deficit over the lifetime of the next parliament, but add the convenient caveat that "the exact timing of measures should be sensitive to developments in the economy, particularly the fragility
of the recovery". We agree. With growth flat across parts of Europe, and contracting in others, now is not the time for hasty cuts.

Second, the consensus among governments has been in favour of borrowing and spending, not cutting, as the global economy recovers from the financial crisis. The economists who signed the letter seemed to be forgetting that many other countries in the industrialised world have similar or worse budget deficits than the UK.

Third, as Winston Churchill is said to have remarked, "If you put two economists in a room, you get two opinions." The idea that this letter is the last word on fiscal policy is nonsense. Our own David Blanchflower, in his NS column (page 19), says the letter-writers are practising "the economics of making things up as you go along . . . How do they know, for example, what the economic situation will be in, say, six months' or 12 months' time?"

The Nobel-prize-winning economist Joseph Stiglitz, in an interview with Newstatesman.com last week, condemned the "Hooverites" who want to reduce spending in the middle of a downturn, and warned that such a policy would “almost certainly lead to higher unemployment". Another Nobel laureate, Paul Krugman, wrote recently that "it's important to be clear that the call for immediate austerity isn't grounded in unarguable economics; in fact, the arithmetic tells you that what Britain does in the next year or two is virtually irrelevant to its long-run solvency".

The Chancellor, Alistair Darling, is therefore right to reject this latest call for immediate cuts. Fiscal austerity, far from being the solution to economic misery and widespread unemployment, would merely prolong it.