Mervyn King, the Governor of the Bank of England, has cautioned against further significant spending by the government to stimulate the economy. Mr. King argues that the current high levels of debt means that the government needs to be careful about further spending.

Mr. King did concede there is ‘room for targeted and selected’ measures in some areas of the economy, and said that increasing levels of debt in an economic downturn is the right course of action, and that for the next two to three years we need to accepts very large fiscal deficits.

Some experts interpret Mr. King’s words as ‘the government must be mad to consider another large stimulus package’. I believe that if Gordon Brown continues to pour money we don’t have into a market that is impossible to control, we won’t have large fiscal deficits for the next two to three years, but the next two to three decades. Mr. Brown’s spending is shortsighted, and leaves one to wonder if this is to win the next election? Surely the coming generations will have to pay for this reckless spending and borrowing, without actually having seen any benefits from it. Some people say to leave the markets to recover by themselves, while the banking system receives an overhaul and money is spent on the people badly affected by the economic downturn.