Before I get stuck into the hurly-burly of the election campaign, something has been bothering me. Labour have been patting themselves heartily on the back for the ‘fiscal stimulus’ that they introduced last year, chiefly the cut in VAT. Leftists and liberals generally have gone further, and called for an additional fiscal stimulus now, to stimulate the recovery.
So, why are they so angry at the Tories’ proposed reduction in the increase in NICs? After all, if it is paid for by reduction in waste, it will be fiscally positive as unproductive spending is cut, returning additional wealth to the people. And if these cuts in ‘waste’ do not materialise, then it is an unfunded tax cut, paid for by increased borrowing. Or, to put it another way, a fiscal stimulus.
You’d have thought they’d have been all in favour.