Setting a timetable for reprivatisation

Niall Ferguson’s article in today’s FT may concentrate on the case of US banks, but it contains much food for thought for UK policymakers.  Here are a few key paragraphs:

“The US could end up running a deficit of more than 10 per cent of gross domestic product this year (adding the cost of the stimulus package to the Congressional Budget Office’s optimistic 8.3 per cent forecast). Today’s born-again Keynesians seem to have forgotten that their prescription of a deficit-financed fiscal stimulus stood the best chance of working in a more or less closed economy. But this is a globalised world, where unco-ordinated profligacy by national governments is more likely to generate bond market and currency market volatility than a return to growth.

There is a better way to go but it is in the opposite direction. The aim must be not to increase debt but to reduce it.