The IMF has claimed that austerity is not working and there is a need to slow the pace of budget cuts and provide further stimulus if there is to be a recovery next year ("Borrowing rise puts pressure on Osborne", The Herald, July 20).
Meanwhile, "It is time for a change of tack'', demands The Herald ("Retail sector in need of hard sell", July 20).
I disagree with these misguided Keynesian views, because this is not a Keynesian recession. Keynes argued that, within the context of sound money, the Government should borrow and spend idle savings in order to increase economic activity: in other words, run a budget deficit during a downturn and pay it back by running a surplus during a boom.
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