One of the world's leading economists has urged Gordon Brown to reject "fiscal fetishism", defy the markets and maintain, or even extend, the fiscal stimulus of the British economy.
Joseph Stiglitz, who won the Nobel Prize for Economics in 2001 and has served as chief economic adviser to President Clinton and chief economist at the World Bank, warned that the financial markets were like a "crazy man" that could not be appeased with cuts to public spending.
"You're dealing with a crazy man. You're asking what I can do to placate a crazy man? Having got what he wants he will still kill you," he said.

In an exclusive interview with The Independent, Mr Stiglitz rejected the idea, put forward by David Cameron, that some symbolic trimming of the budget deficit in the current year might regain the confidence of the financial markets. He also said that it was "unconscionable" for the ratings agencies to threaten to downgrade Britain's creditworthiness, given their poor record in the crisis. "Fiscal fetishism is really dangerous," he said.
If the financial markets refused to buy British government bonds, or gilts, as Mr Cameron has suggested they soon might, the Bank of England could buy them instead, Mr Stiglitz said, as it did during its recently paused programme of quantitative easing, which mopped up about £200bn of gilts.
His intervention adds to the growing criticism of Mr Cameron's economic policy and will be seized on by Gordon Brown as evidence that Labour's policies are being backed by the world's leading economists.


One of the world's leading economists has urged Gordon Brown to reject "fiscal fetishism", defy the markets and maintain, or even extend, the fiscal stimulus of the British economy.
Joseph Stiglitz, who won the Nobel Prize for Economics in 2001 and has served as chief economic adviser to President Clinton and chief economist at the World Bank, warned that the financial markets were like a "crazy man" that could not be appeased with cuts to public spending.
"You're dealing with a crazy man. You're asking what I can do to placate a crazy man? Having got what he wants he will still kill you," he said.

In an exclusive interview with The Independent, Mr Stiglitz rejected the idea, put forward by David Cameron, that some symbolic trimming of the budget deficit in the current year might regain the confidence of the financial markets. He also said that it was "unconscionable" for the ratings agencies to threaten to downgrade Britain's creditworthiness, given their poor record in the crisis. "Fiscal fetishism is really dangerous," he said.
If the financial markets refused to buy British government bonds, or gilts, as Mr Cameron has suggested they soon might, the Bank of England could buy them instead, Mr Stiglitz said, as it did during its recently paused programme of quantitative easing, which mopped up about £200bn of gilts.
His intervention adds to the growing criticism of Mr Cameron's economic policy and will be seized on by Gordon Brown as evidence that Labour's policies are being backed by the world's leading economists.

Full story:
Forget cuts and keep spending, Brown told - UK Politics, UK - The Independent

Further evidence of support among the economics community of Labour's macroeconomic policy. But hey, what does Joe Stiglitz know? He was only chief economist at the world bank....