The economic press is full of articles about the risk of a double-dip recession.
Some argue about the need to sustain stimulus interventions. We may ascribe Barack Obama and Ben Bernanke among those (a stand that caused the departure of the Head of the Office of Management and Budget). Others are more hawkish and believe that a strong fiscal tightening will reassure investors and get the engine of growth going again. We should include here David Cameron and George Osborne.
Now, here at PFM Board, we like to take a stand. So participate in the above poll and make comments about your choice.
I myself voted in favour of austerity. Why? read the attached article from the Economist
Fiscal fundamentalists - Austerity or stimulus? Some economists have much more extreme views than that on the Aug 12th 2010 edition.
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Conventional measures of public debt show the legacy of past borrowing. Generational accountants look far into the future as well. They tally how much the government can expect to collect from present and future generations, through taxes and the like, and how much it can expect to spend on them. The fiscal gap is the difference between the two, expressed as the amount the government would have to set aside today to fill the hole. For many countries, the gap is enormous—multiples of GDP—largely because their citizens are living longer and having fewer babies....
Private and public sectors are locked in a marriage, wherein the division of the family’s resources is always negotiable.
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Read the article in full at
http://www.economist.com/realarticleid.cfm?redirect_id=16792828
Poll