Background: Anatole Kaletsky is the worst economic writer in Britain:
Feb 5 08
The US is currently facing a mid-cycle slowdown rather than a full-blown recession. One way or another, the credit crunch is likely to end within the next month.Mar 21 08
There is a persuasive argument that the US economy is not even in recession, since growing exports are compensating for much of the weakness in housing and consumer spending. And better still, a period of much stronger growth lies ahead only a few months ahead.
Once the stimulus from the tax rebates runs out at the end of the year, the US economy will receive another shot of adrenalin from low interest rates.
The implication of this cleverly designed combination of fiscal and monetary stimulus is that decent growth is virtually guaranteed from the summer onwards.May 5 08
So, the sky did not fall in. It is increasingly likely that the US economy will not experience even a minor recession as a result of the credit crunch last year. Even more important than the relatively benign statistics is the news from the financial markets. Signs that the worst of the banking crisis may be over appeared to be confirmed by rallies in financial markets worldwide last week.Jun 16 08
Why does anyone still think that the US economy is in recession? The troubles in US banking and construction have been almost exactly offset by gains in America's booming international trade. There is a world of difference between a dislocation confined to only one or two parts of the economy, such as housing and finance, and a generalised economic decline.
If there were going to be a US recession in response to the credit crisis, it would have started by now. So let me stick my neck out and say without qualification - the US economy is out of the woods....and now the coup de grace!!Sep 20 08
n America, by contrast, an outright recession would be avoided if financial stability could be quickly restored. The worst of the housing slump there appears to be over, consumer confidence is rising and a gradual economic recovery should soon be under way.
WTF????Punish savers and make them spend money
Near-zero interest rates and even a tax on bank deposits are necessary to force those with cash to use it productively
The battlelines are drawn. On one side we have the Labour Government and the Liberal Democrats, the Bank of England, the US Federal Reserve Board and the vast majority of Keynesian economists in every country - plus Barack Obama. On the other side, the Tory Opposition, the German Socialists, the European Central Bank, the Church of England and the vast majority of Marxist economists in every country - plus the British public. The question, of course, is what to do about the recession. Specifically whether the way out is “to spend, spend, spend or to save, save, save” - as David Cameron has so clearly put it...
...The next logical step, although it may be politically controversial, would be to do the opposite of what the Tories suggest. Instead of reducing taxes on interest payments, the Government could tax all bank deposits and other risk-free savings.
Read the comments section at the bottom. He cops a slating.