Letters: Just how should you pronounce vermouth?

Down to zero

Sir: Paul Collier’s siren call to take advantage of near-zero interest rates to go on a massive government infrastructure splurge is one Jeremy Corbyn might welcome but Conservatives should resist (‘Back to Plan A+’, 16 November). Japan tried what he is proposing when its bubble burst in 1990. The result: $6.3 trillion debt and two wasted decades. As Harvard’s Edward Glaeser has noted: ‘No one can look at the Japanese numbers and conclude that the money has ramped up the growth rate.’

Apart from anything else, politicians are poor allocators of capital. In a 2009 paper, ‘Survival of the unfittest’, Bent Flyvbjerg, professor of major infrastructure projects at Oxford University, concluded that rich countries can afford infrastructure white elephants, but did not become rich by building them: ‘They do so when they have become rich.’ The most damaging consequence of Sir Paul’s proposal would be to lock Britain into near-zero interest rates.