I had a talk with John Kay from the Financial Times in the Bank of England about PFI's some years ago before the crash. We both agreed then that they were a scam and a waste of money. they should never have been allowed to go ahead. I think that unless there is a radical way of breaking these contracts or nationalising the contractors will there be a way out of these unfair contracts.
 | | |
| Yahoo article wrote: Government can often be wasteful — if so, borrowing by the government to spend will make an economy less productive. Also people and companies realise that they'll have to pay for current government overspending in the form of future taxes. As a result they save more and spend less. In turn, you hamper growth and simply dig yourself deeper into the hole. | |
| | |
Yes but private business is not always perfect either. How many of you have seen a complete waste of money at your employer? Probably everyone. it is just not reported so the fallacy of private efficiency is born.
I will admit that I am a Keynesian but that does not mean tax and spend. Keynes said that during booms that the government must run surpluses to stop bubbles and keep the economy from overheating. Though when aggregate demand is low then spend your way out of the recession. That seems to be the only lesson learned by politicians. When Conservatives get into power and see a surplus they use it for tax cuts, which if you believe them stimulate the economy but when it crashes the tax base is so much lower that they cannot afford the deficit so have to cut spending again. Creating a vicious cycle.