I`d like people to say how they would make the cuts, if at all, and why.
Tax increases they would make, if any, and why.
If you believe we should run a keynesian deficit say how large and why - also what cuts/tax increases you would make.
I see & read alot of anti cuts posts here, on comments sections of news sites & on other web forums. Also alot of protests are against cuts. I`d like to hear more about what these people believe should be done.
Personally I believe that running a Keynesian deficit, while useful in normal recessions, will not work here. This is because in a normal recession output can be expected to return to previous levels. This recession is going to settle at a lower output level because the previous levels of output were caused by a bubble. Therefore cutbacks/tax increases need to be made to close most if not all of the gap.
Deficit spending for capital projects should be viewed separately. A simple formula for working out if a capital project should go ahead or not is if the % return on the money borrowed to pay for the project is higher than the % of interest payable on the sum then go ahead.
Clearly there are alot of hurt and angry people who will be personally affected by cuts and taxes but if we fail to act the problems will put us all in a worse position only further down the line.
Interested to hear others views...