David McWilliams: Here’s some budgetary advice: time to let it rip

The idea that our fiscal policy is too expansionary when we have 10 per cent unemployment is ridiculous

18th October, 2015
There is little danger of the economy overheating, so why are economists making worried noises about a spendthrift budget? Picture: Bryan Meade

One of the strangest reactions to last week’s budget was that it was dangerously expansionary. This is quite bizarre, particularly when the economy has so much spare capacity. When you have a rate of unemployment twice that of your nearest and most important trading partners and when your rate of interest is lower than theirs, what is the world telling you?

It is telling you that there is excess capacity everywhere in the...

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