I WAS taken aback by Malcolm Rifkind's lack of understanding of basic economics. (Commons Touch, March 26).
First of all, the Treasury cannot 'print more money' to cover the shortfall in the government budget.
It has to go to the financial markets and compete with other borrowers to raise the funds. Only the Bank of England can print more money through quantitative easing, and even then only when this is consistent with its statutory objective of keeping inflation at its two per cent target level.
Secondly, his recipe for keeping government spending within the bounds set by tax revenues would produce a meal fit for a pauper.
If government had not embarked on an ambitious stimulus package, using taxpayers' money to rescue UK banks, we would now be headed for a depression even worse than in the 1930s.
I am sure Sir Malcolm has no difficulty balancing his own household budget.
He gets paid more than double his generous salary and expenses as an MP through his various directorships, in companies that fund their business operations through borrowing!
NIGEL WILKINS Petersham House
Harrington Road London SW7 3HD
