We’re going to spend our way out of recession!

I was reading this interesting article over on the thisismoney website about Alistair Darling’s plans to spend “whatever we can” to keep people in jobs during this recession. Now this course of action might be commendable as it is an attempt to keep people in work and off benefits – which I guess would cost the country more in the long-run.

In a country where the economy is inextricably linked to the housing market, can it be wise for a Government to simply try and spend its way out of recession?

I don’t like “big government” and feel that the exit from the recession should be down to market forces. What this government should be focussing on is improving the education system and retraining those people who are currently or who have recently been working in dying industries – those industries in which we are no longer competitive on an international playing-field.

Funding this expenditure will only lead to further raising of finances by the Governement which will generally be through higher taxation.

Whilst the Government is spending, most of us will be saving, rebuilding our portfolios and taking advantage of depressed stock markets for longer term capital growth and real income.

Just a reminder – the ISA allowance increases for the over 50′s on 6th October 2010.