The discussion of world credit problems has concentrated too much on the trees and not enough on the wood. We hear a lot about which financial institutions should be bailed out by central banks and on what terms; which financial instruments are most to blame and whether they can be better regulated in the future. Of course these are important questions, however embarrassing they are to those who have preached nonintervention and competition.

Yet in all this detail it is easy to lose the point of the exercise, which is perhaps too simple for the technocratic mind. It is to ensure a growth of nominal spending – that is spending in cash terms – rapid enough to support sustainable growth but not so rapid that it generates unacceptably high inflation. Whether this is brought about by conventional central bank interest rate policy, the reanimation of moribund credit and capital markets, tax cuts or sensible government spending is secondary.