It’s very hard to get a sensible discussion on fiscal policy going right now. Perhaps Keynesian economics was always too paradoxical to impress the plain men and women who write Times leaders on the subject. In their world view, Labour’s modest spending pledges — notably on childcare — would, if implemented, “draw money from business”. They do not realise that government spending only draws money away from business if the economy’s resources are fully employed, which is patently not true today.
In face of heavy unemployment, extra government spending draws money towards business by creating additional purchasing power for people to buy goods and services. But I expect this is a paradox too far for our current opinion leaders.
Robert Skidelsky 