And this week into the current economic crisis stepped the Tories with their ill thought-out plans for (a lack of) recovery. Cut public spending here, freeze public sector wages there, reduce the benefits of the poor, raise the pension age, and so on. It was hard to see any group that stood to benefit from their proposals.
Lesson one in a deep recession is you don't cut public spending until you are into the boom phase. Keynes taught us that. The consequence of cutting too soon is to drive the economy into a depression. That means rapidly rising unemployment, social disorder, rising poverty, falling living standards and even soup kitchens. The Tory economic proposals have the potential to push the British economy into a death spiral of decline that would be almost impossible to reverse for a generation.
The debate at such times is not about big government versus small government. It isn't about moving this service from public to private sector because the private sector can do it better. The debate here is about maintaining levels of aggregate demand. In a deep recession the choice is: the government does it or nobody does it; it is public spending v no spending. You don't worry about paying off debt when you are at war: you have other priorities. Win the war first.
To cap it all, the leader of the opposition, in his speech to the Tory conference, amazingly discussed what he called option one – the possibility that the UK should default on its debt. Mr Cameron, you shouldn't even be raising such possibilities. It's exactly what markets want to hear from a potential leader – you have actually even considered defaulting on our debt? Unbelievable. Better to have said nothing honestly.
Cameron's dud options | David Blanchflower | Comment is free | The Guardian