ALEX BRUM­MER MER

The Jewish Chronicle - - Business -

gov­ern­ments.This­took­t­woforms.Inthe first in­stance al­most a tril­lion pounds in Bri­tain alone was spent hold­ing up the bank­ing sys­tem and this was mul­ti­plied many times over across the globe. Se­condly, when the global econ­omy came to an alarm­ing halt in early 2009, gov­ern­ments poured mas­sive as­sis­tance back into their economies. This was done through the au­to­matic sta­bilis­ers, the trans­fer pay­ments in the shape of un­em­ploy­ment ben­e­fits and wel­fare to those who lost their jobs, and di­rect as­sis­tance in the shape of tax breaks (the tem­po­rary cut in VAT to 15 per cent), carscrap­page schemes and the like.

In many of the ad­vanced West­ern economies the mea­sures taken pre­vented coun­tries, in­clud­ing Bri­tain, fall­ing into a 1930s-style re­ces­sion and growth re­turned in 2010. But the cri­sis of 200709 left be­hind a new cri­sis of bloated bud­get deficits and swelling sov­er­eign debt. The first fis­sures in sov­er­eign debt came to the sur­face some 16 months ago

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