Should Britain spend its way out of a recession?

[rov1200]

http://news.bbc.co.uk/1/hi/business/7691839.st m

Alistair Darling with the help of Gordon Brown suggests we spend our way out of a recession. Sixteen economists have stated publicly that this is a bad idea as its no guarantee it will work. The funding will go towards major projects that were earmarked for the future.

Is it a good idea to bring the projects forward?
Will it help the economy and allow people to stay in their jobs?

Should the projects have been more short term instead (ie 1 year) to see us through the recession? Instead a future general election will allow the Tories (if elected) to cancel them and re-institute their own policies.

China had nearly full employment because their projects employed much manual labour. Wouldn't it be more beneficial with millions to be unemployed to have projects that used a great deal of manual labour?

[helpmetoo]

if two million unemployed were put to task digging an enormous great hole it still wouldnt be as big as the one this labour lot and particularly the under prudent sub-prime minister have dug for themselves.....and us,

clueless of downing street

foxtrot oscar

[BertiWooster]

Very good .

Now , how about answering the specific points raised .

[R1Geezer]

This has always been the underlying way for socialism. The theory is initially attractive. Ie emply the unemployed and charge them tax, they will have wages to spend an the treasury gets some income. The problem is that the money was already in the treasury so you spend a pound to get probably 45p back in various taxes. In the short term it can be seen as working but anything going out of the public sector in the end is put in by the taxpayer. If it is based on false wealth then it is a vicious circle doomed to failure. Public debt grows exponentially untill eventually the there are more net tax takers than tax payers. It's like borrowing on a credit card to pay the mortgage, at some point you run out of avalable money and you can also end up with a bigger "mortgage" on credit cards than the actual "mortgage", not sustainable.

[R1Geezer]

So to answer the question, NO!

[Gromit]

The United States are planning something similar...
Federal Reserve Chairman Ben S. Bernanke endorsed the idea of further stimulus for the first time in congressional testimony./i>
http://www.latimes.com/news/nationworld/nation /la-fi-econ21-2008oct21,0,7967901.story

Likewise those socialist Japanese are planning the same...
Japanese Prime Minister Yasuo Fukuda will spend about $108 billion (11.7 trillion yen) on a stimulus package
http://www.moneymorning.com/2008/08/31/japan-r ecession/

Likewise Australia...
While the Federal Government admits there are tough times ahead, it is hoping its big spending on infrastructure projects like roads and bridges will give regional areas a much needed lift.
http://www.abc.net.au/news/stories/2008/10/20/ 2395578.htm

It seems the whole world has fallen for this crackpot socialist idea.

[rov1200]

I assume if these other countries are giving a jolt to their failing businesses it is not for altruistic reasons but only have there own country in mind. Therefore there will a greater trend towards protectionism, giving the contracts to their own citizens and companies. They would ensure that imports would greatly decrease using this strategy..

Our diminishing value of the � said to increase exports will only cause our balance of payments to shoot through the roof.

Therefore following the Australian example is a path worth considering?

[AaronS]

Yes i believe they should, but I am wary that excess spending will affect the market in 10 years time.

[anotheoldgit]

Since we are part of the European Community, it would be refreshing to hear what is happening in these other countries. How are they dealing with the situation? How many jobs have they lost? Are their banks in trouble? Have they also got their backs to the wall? Are we pulling together to get things back on an even keel?

Does anyone know?

[Gromit]

EU says it won�t spend its way out of recession
Despite signs the European Union�s leading economic powers are slipping into a recession, the way out isn�t a spendthrift policy as a counter-attack, the region�s finance ministers said after a heavyweight meeting in Nice, France.
http://www.neurope.eu/articles/89720.php