Fiscal stimulus: Does Government debt really rule it out?

Posted on March 26 2009

For a sober analysis of the issues read what Adam Lent has to say.

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One Response

  1. linda kaucher says:
    March 27 2009 at 11:49 am

    Surely a major problem with ‘fiscal stimulus’ in the form of govt spending on infrastructure, is the actual set up of the EU. The current EU structure means that govt spending, at the EU member state national level, which is where spending is, cannot be spent for benefit at the national level – so why would member state govts, apart from liberalisation and ego crazed Brown, take this route?

    It is pouring money into a bucket with holes in it, nowhere more the case than with this UK regime.

    Any infrastructure contracts must be (and this govt would have it no other way) offered to all EU firms. Firms from other member states get the contracts because they have a cheaper workforce and can undercut. The European Court of Justice has established that firms can legitimately bring in their own workforce. Even if they don’t, as soon as jobs are created here, workers from any member state can come in (and usually do them cheaper). Jobs CAN NEVER be created for UK workers under the current EU rules. This is a major problem with measures in regard to this slump.

    Add to this the fact that Brown will have no projects that are not PFI – so public spending goes straight to private, transnational shareholders. And tax havens???

    This is why we cannot actually have any infrastructure ‘fiscal stimulus’ spending, and its time that someone (the BBC at least) called Brown’s bluff on this.

    Then we can have the discussion on how we address it e.g changing EU rules.