An economic stimulus I could support

A few weeks ago when the Government started dropping hints that it was intending to borrow its way out of recession, my immediate worry was that it signalled a return to Government spending as a way of stimulating the economy.

In more recent days, the indication from the Treasury is that the stimulus is more likely to take the shape of tax cuts. Let’s hope so. Today, Government Ministers went on a media frenzy to say that their initiative to cut wasteful spending had been more successful than they had hoped for. Maybe it’s a sign that spending is not their economic panacea. Let’s hope so too.

Despite all the talk of clear blue water opening up between the parties on the economy, there is also a consensus emerging which can be summarised as follows:

Cut interest rates – with inflation falling significantly last month, more interest rates cuts must be on the way.

Cut taxes.

Cut public spending.

Those are three things I could sign up to and if the spin is to be believed, it seems that Labour, the Lib Dems and the Tories are all coming round to this view too. We’ll see next week at the Pre-Budget Report. Maybe, I’m getting too optimistic and only reading those articles I want to read.