The cause of the slump is still misunderstood  

The news that the public sector net debt has now passed the £1 trillion mark isn’t really news since it’s long been on track to reach £1.4 trillion by 2014.   What is far more disturbing is that the government, in its obsession to cut the public sector deficit regardless, has completely ignored the impact this is having on the private sector deficit in driving the slump.   The government’s answer to drooping demand and consequential languishing growth is to pump colossal amounts of new money into the economy via so-called quantitative easing (i.e. printing money), first £200bn under the Labour Government and now a further £75bn under this government, but it has had virtually no impact at all in stimulating growth, either here or in the US, because the lack of base money (M0 in the jargon) is not the cause of the crisis.   The real problem is what...