Douglas Carswell's Blog

Plan B? Try tax cuts

The IMF's suggestion that the British economy is slowing down has resulted in inevitable calls for a Plan B.

But why is it that so much of the commentariat automatically presume that any Plan B must mean more government spending?

There are two ways to encourage an economy to grow; supply side reform (deregulation, liberalisation etc) and demand side (either higher spending or tax reduction).

In other words, raising public spending is just one of a range of things our political elite could be doing, and could have done over the past few years.

Think of the tax cuts that all that extra public spending we've hosed at the economy could have financed? Indeed, cutting tax not only injects money into the economy, but with millions of people and businesses deciding how, it usually does so more effectively than when state officials do so.

Looking for a Plan B? Try lower taxes.

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