Sunday, April 11, 2010

Thatcher's Think Tank Calls for Total Financial Overhaul

The UK politics has risen up to fever pitch, after Prime Minister Gordon Brown announced Wednesday that he is calling the election on May 06.

While politicians contesting for the parliament are promising hope and change, former conservative prime minister Mrs. Thatcher's think tank, Institue for Economic Affairs(IEA) says a total financial overhaul is required and that the deficit can be slashed without raising tax burden.

Keynesian economists in UK want to return to the principles of John Maynard Keynes, the guru of government intervention. They are urging the UK government to spend its way out of the recession. A commentary on Business Week by Mattew Lyn "Deathbed of Keynesian Economics Will Be in U.K" gives both sides of the economic argument.

"So who is right, and who is wrong? It’s a debate that matters to the rest of the world. After all, if demand management doesn’t work here, it won’t work anywhere.

The U.K. has some experience of mass letter writing from Keynes’s devotees. In 1981, a group of 364 economists wrote an open letter ripping into the policies of then Prime Minister Margaret Thatcher. They turned out to be totally wrong, of course. With hindsight, no one can now dispute that her policies led to a long and durable economic revival."