Financial Times FT.com

How to boost economies without running up huge debts

Published: November 10 2008 02:00 | Last updated: November 10 2008 02:00

From Mr John Sunley.

Sir, Governments looking to boost their economy by sending cheques to consumers, as in the US, or cutting income taxes to encourage consumer spending should issue “20 per cent off” vouchers to each household. If I were to receive a $200 cheque I may or may not spend $200, but if I were to receive a voucher valid for six months that gave me 20 per cent off everything I spend up to $1,000, I would be likely to spend $1,000. The cost to the exchequer would be $200 in each case, but the latter gives a five-fold benefit.

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