The following is “By the Editors” at Bloomberg:
The too-tight squeeze on fiscal policy is self-defeating. If the cycle of stagnation and austerity continues, the debt outlook will continue to worsen and markets will have more reason to worry, not less.
The government has already identified the right thing to focus on: infrastructure. There’s an enormous backlog of worthwhile projects; the short-term boost that construction delivers to the wider economy for every pound spent is high (the Confederation of British Industry says the so-called multiplier is almost 3); and well-chosen infrastructure supports long-term growth.