Lots of sense here.... How to make the recession less painful ? cut taxes If we want to get out of this recession in one piece, what really needs to be done? Interest rate cuts won't work. They haven't worked in the US, they didn't work in Japan. That's because as a nation, we're up to our eyeballs in debt. Banks can't afford to lend money; we can't afford to borrow it. All of us need to pay off our debts and build up our savings. So it doesn't matter how cheap money gets, we've snapped out of spending mode and strapped on our tin hats. So the quickest route out of recession is to help people pay down debt and build up their savings. Inflation is one way to reduce the value of debt, but it generally comes with a hefty price tag ? currency collapse and economic meltdown. Higher interest rates might help build up savings, but they'd also make debt more expensive to service. How can we help people save more without fuelling inflation or making our debt burden even worse? Simple. Cut taxes. If you cut taxes, you almost automatically increase productivity, because you take money from a wasteful, inefficient organisation ? the government ? and reallocate it to someone who actually gives a damn about how effectively it's spent ? the individual. And rather than squander the money on property (as the Government is proposing), individuals would use it sensibly, saving it, or using it to pay down debt. This isn't a magic bullet. It won't stop the recession ? nothing can. The looming bust is nature's way of telling us that we spent too much money on unproductive garbage during the good times. Look at it this way. If we'd taken all the money we spent as a nation on property in the past ten years, and had pumped it into ? let's say ? our energy infrastructure, then maybe we'd have lower gas bills, and a nice, productive industry providing highly paid, specialist jobs that would be tough to outsource. Instead, all we've got is big debts, an unwanted pile of jerry-built buy-to-let flats which are already turning into slums, thousands of unemployed estate agents, and a national energy crisis. It's depressing, yes. But what we can do now is put an end to the rot and the waste. The quicker those savings build up, the faster balance sheets are repaired and the quicker we can get out of this downturn. Will this happen? I doubt it. The Government still believes the great lie, that you can spend yourself rich. It still believes that "something must be done." Better get ready for a long, drawn-out, painful recession.