Osborne warns against “sowing the seeds” of the next crisis

An effective article from George Osborne in today’s FT. Here’s the key paragraph on the public finances:

“Today, we must let the automatic stabilisers function. But as Lord Burns, former permanent secretary at the Treasury, warned last week, borrowing beyond that without being clear how the bills would be paid would be ‘very dangerous at this point’. ‘We begin from a position of a structural deficit. Adding to that structural deficit can only increase the problems subsequently,’ he said. I agree. Spending our way out of recession will not work. Targeted tax cuts would help but they must be properly funded. Any tax cuts must not permanently increase the structural deficit and must be combined with a strategy to reduce it over time. If they are not, Britain’s international credibility will be further imperilled, future generations will be burdened with even more debt and a recovery would be threatened by the prospect of large tax rises.