Wednesday, 6 March 2013

A Rock and, oh look, A Hard Place

Everyone knows that it is sensible to put some money away for the day when you perhaps won't have as much money. Maybe you will lose your job, or need to pay a particularly large bill that you were not expecting, so you will need some savings to help you get through.

The problem is that the government was not nearly that smart. They know that they have got to spend money on things like roads and buildings if they are going to pump life into the economy, but are broke. They didn't save enough when the times are good, which means they haven't got anything to spend when the times are, well, not so good.

This means that when Vince Cable admits that austerity is crippling the country, as he has just done, he is stuck between a rock and a hard place. He, as Business Secretary, could launch massive schemes that would save the world and make everyone happy while it risked the financial stability of the government, or he could simply continue the stagnation that we are in.

If George Osbourne decides to abandon his beloved austerity measures, then we will be entering a murky world where there is a fine line between funding a recovery and watching a government go bankrupt. Either way, it will change the lukewarm economy into something properly hot or cold.

It will be gambling with ordinary people's jobs, but in they are being harmed as much by this barren valley that we have got stuck in. Something needs to be done, everyone knows this, but whatever it is needs to be done with care, in order to prevent things getting worse. Maybe even something simple might help people who are struggling, like reducing VAT so that we can afford to buy more and the economy is stimulated.

It is easy to understand why the government chose to make cuts and to try and stabilize the country, but now the economy has potential, with the only thing holding it back being the government. Maybe it is time to let the economy grow,.

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