Stephen Gordon considers two options and advises neither. At least for now.
So that leaves neither renewed stimulus nor a program of austerity – at least, not for the 2011-12 fiscal year. Next year, if current trends continue, we’ll face a different set of circumstances: the recession will likely be behind us, and the deficit will likely still be with us. It would be nice to see some indication in this year’s budget of how the government intends to deal with next year’s problems.