Is the middle class recession back?
N.B. Written on Saturday – but didn’t appear for some reason
There’s less talk of green shoots in today’s papers after yesterday’s poor GDP figures. In The Times the middle class recession is back. Times are certainly tough in Maidenhead. Their case study picture (in the paper – not online) is captioned:
“Mrs Williams has taken to buying two-for-one offers at Waitrose”
But if the obvious depth of the recession and likely shallowness of the recovery is becoming apparent then it may be easier to resist the clamour for spending cuts. As Polly Toynbee notes today:
“Out there, economists as diverse as Paul Krugman, Sir Samuel Brittan and Martin Wolf are just a few from left and right who think the national debt more manageable than alarmists proclaim: immediate cuts will do untold harm. Brittan, an old monetarist and no lefty, wrote this week that there is a strong case for putting the paying down of debt onto the back burner: the more a nervous public saves, the more the state should spend to offset it, he says. He warns that the New Deal recovery turned into a recession in 1937-38 because of “premature action to tighten money and balance the budget. There is now more danger of economic stimuli across the world being reversed too soon than of their being continued too long.”