I know the policies being proposed by Cameron will be a disaster for the country and it’s not just me, when Johann Hari asked this year’s Nobel Prize winning economist Paul Krugman about the Tories policies:

Krugman was “shocked” by hearing David Cameron’s economic statements in favour of “tightening the government’s belt” in a recession. “It’s pure Herbert Hoover,” Krugman says. “In fact, it reminds me of Andrew Mellon [Hoover's Secretary of the Treasury], who said the [government] response to the Depression should be to ‘liquidate labour, liquidate stocks, and liquidate farmers’.”

Many of Cameron’s statements are “just wrong”, Krugman says. For example, Cameron says Britain can’t afford a fiscal stimulus because we are going into the recession with the highest debt of any developed country. “But that’s not true. Britain is at the lower end of the middle of developed countries [when it comes to national debt]. Less than the US, much less than Japan or Germany or Italy.” Krugman is worried by the incorrect lessons Cameron has drawn from the 1930s. “Renouncing a fiscal stimulus when private spending is contracting is strange. Governments have very few tools at their disposal, and Cameron wants to not use them.” So are you saying our recession will be much worse if we follow Cameron’s advice? “Yes. For sure” says Krugman.

Hari sums up

This is our choice now. Obama and Brown will have to be pressured hard to make their stimuli much bigger, and to focus them less on propping up old corporations and more on building a new low-carbon economy. They will make many mistakes. But, as President Franklin Delano Roosevelt put it, “Better the occasional faults of a government that lives in a spirit of charity than the constant omission of a government frozen in the ice of its own indifference”. Source: The Independent.

Yes – let’s not get frozen in the ice of Tory indifference.