Unfettered spending,investing and borrowing made this mess.Seems the university you attended made a bad investment in you.

Clarence, rochester, united states

Try and get a sub prime mortgage in France and see how far you get, just a question, each time your house values up and you keep releasing that added value in cash and spend it on new cars , holidays etc, how and when do you repay it.

Rob, newark, notts

What a disgrace!! Taxpayers bail out the capitalist swines of the banking industry only to then be taxed on their savings to bail them out again!!! It beggars belief. This country has totally gone down the pan, driven directly into the abyss by the last 2 governments. I'm utterly disgusted.

Simon Tinkbridge, Towcester, UK

Saving for retirement (voluntary or enforced) is essential if the country is not to become bankrupted by huge numbers on benefits.

Why have we not been doing this and why are those responsible for our country's planning being rewarded for their failure?

Mike, Chatham, UK

Spend more money? I would love to. When those lovely credit card companies lower their interest rates to match the interest rates I'm getting on my savings account, I'll consider it. Otherwise forget it. I'm not going into hock just to keep them or anyone else happy. It's my money, I'll decide.

Elizabeth, Conway, USA

The Yanks got this World in a financial mess and passed all the Buck (or lack of it) down the line to every other country in the World, and because many of the Worlds banks had money invested in American Banks we now all find ourselves in the same leaking boat,its time to ignore America

Dennis, Worcester, UK

As a 25 year old recently made redundant, spending is now my only option.

joanne, london,

sounds like the 365 'wise men' who criticised Thatcher's budget which cut govt spending in 1981. The talking heads said it would kill the UK economy - it did kill the weak companies. The rest came through (after much pain) and the economy started working. But that's not keynesian enough is it ?

ab, ipswich,

How about we allow capitalism and the free market to actually behave as such and let the weak die? It's kind of ironic that saving should be construed as Marxist, I see it as quite the opposite!

Spend, spend, spend all for the "collective good" eh? No thanks! I wouldn't want to become "Marxist".

Bruce, Lowestoft,

I'd happily spend my tens of thousands of savings on a new kitchen, furniture,patio, extension- but wait- like everyone else I know of of my generation, we don't own our houses because greedy people lied on self cert mortgages or loan applications, aided by government and lenders, pricing us out ..

DanOxford, Oxford, England

If we spend all our money in one go,wouldn't that cause the banks to shut down.
Funny that the people that suggest this are no doubt wealthy and will weather the credit storm. The rest of us can just get poorer!!!!

laura, east kilbride, scotland

Just a word of caution for those of you about to stuff your mattresses with your hard earned savings. If enough of you do it then Mr Brown will change the currency and give you 75p on the pound to change it. That’s if he allows you to withdraw or move your savings in the first place. If anyone wants another pair of hands at the barricades, give me a call.

Jim, Peterborough, UK

The public are spending on things they want eg holidays or with John Lewis (who are opening new stores), but they will not spend on global warming and expensive cars, nor on fripperies or even more clothes. It's the ecoculture - stupid!

Alan Beeson, york,

As soon as a tax on saving is introduced I will do as some already do, withdraw my money from the bank, equities and bonds and put it under the bed. I can then draw on any number of benefits the government offers as I would then have a low income and no savings. How does that help the economy?

John, Skegness, England

i say let the banks fail. global anarchy rein, watch the fat cats get ousted and fat lazy governments fall. then we can rebuild to be stronger

liam, aberdeen, scotland

Why should I who have lived within my means bail out incompetently run financial institutions? I would welcome a government which has the courage to prosecute those responsible for the excess both in and outside Government.

Dave, Chorley,

Compare Japan and Europe? Japan's economic problems from 1991 weren't resolved due to face saving (a cultural problem). USA and UK bailouts are analogous to maintaining non-performing loans. Maybe USA is turning Japanese, whereas the Euro will fall apart leaving 23 countries instead of Euroland.

Mark, London, UK

Nonense. We all have to learn to live within our means, people have been turned into consumers. Do we really care if weak businesses fall? No. This is natural. Companies listed on markets 100 years ago are very different to the ones today. Debts at some point have to be paid back, period.

BK, London, London

What a marvelous way to push granny into abject poverty once her savings have been forcibly spent. What if one simply refused to spend their savings? I'd imagine they'd keep all of their extra income (savings) at home where it cannot be taxed -reducing bank deposits - leading to more bank bailouts.

Jake, Murfreesboro, TN, USA

what happens when all savers remove money from the banks ? what will the banks do then big boy

dave phalp, newcastle , uk

You need to punish Misers? Get a Life, now i have to apologize and take a hit for playing this the right way, by saving, and paying my bills on time. So now it is fashionable to be a debtor? Wow, I can tell you that I will go to the bank today and withdraw about 40K and convert to gold

Tony, Detroit, USA

So for all those who have gone on a spend binge with money they didn' t have? Cameron's got it wrong? What Cameron said was more prudent control of excessive spending beyond people's means, and encourage a better balance between, borrow, spend and save. I think this article clearly misses the point.

Karl, Reading, UK

If savers were punished then many (including me) would hold our money as paper currency or gold (unlike other investments gold's value will never be zero). In either case this massive outflow of money would, due to fractional reserve banking, would further stress the financial system.

Steven Schear, San Francisco, California, USA

You definitely need to punish misers, but i'm not sure this technique will be effective.

alex, new york, usa

Absolutely bogus article. Taxing savings will encourage the wealthy to move their money out of the U.S. even faster. Plus, encouraging credit and spending is a temporary solution to the problem. The past decade was all credit; and now the bill is due. This policy is the quickest way to economic ruin

Kevin, West Lafayette, IN, USA

Anatole Kaletsky's economic thinking is totally bankrupt. Doesn't Mr Kaletsky understand that every consumer also needs to be a producer and vice versa? Savings is only surplus production that has not been consumed. The saver should be free to decide what to do with his capital or savings.

Mario Innecco, London,

Being completely dependent on the Machine, the small amount of freedom most of us have is a function of the small amount of money we've socked away. But this author would have us sacrifice that to the gods of the MIC, and leave us with nothing but 100% dependency. Amazing.

maninwarren, warren,

Quite right, Anatole!
Pounds have been able to buy far more goods than their share of national production.
Those who supported Prudence which was cutting wages and industry, have supported the hollowing out of the economy.
Perhaps now they might wonder whether less Prudence might be less damaging.

Michael Moore, Stockport, England

Absolute nonsense - I would withdraw my savings and keep them in a safe, or move them overseas to a better climate ! You do not give an addict more heroin, neither do you give a country that is in debt up to it's eyeballs more debt ! A fair money system is needed where banks do not increase debt.

Simon, Bradford, UK

I can't believe what I am reading!
Money my friend is only important if you "haven't got any!
I am not spending my hard earned savings just to bail out those who spend what they haven't got!
Extra payments on a mortgage is a sensible course of action, I cut mine by 5 years by doing that.

Jono, Canterbury, England

"strikes me as peculiar that free marketeers are so attached to the laws of supply and demand yet they now wish to subvert them as they apply to money. "
No, laws of supply & demand say the price of money (interest rate) should be going up as supply of money has decreased, not what's happening...

rachel ward, nottingham,

Sorry, too busy saving 33% income to overpay my mortgage.

Boom or bust, my debts need to be repaid so I can't stop to save the nation right now ... (though I did change my car yesterday, lol).

Anyway, I only invest in businesses I understand .... no Ponzi schemes for me.

Mary, Birmingham, England

Ha Ha Ha Ha Ha, oh thank you Gordon I'm laughing with joy, Ha Ha Ha, I'm saving all that lovely money you're giving me through lower mortgage repayments Ha Ha Ha Ha Ha Ha and then I'm going to repay my mortgage Ha ha Ha no more worries about repossession. Spend it? You've got to be joking!! Ha Ha Ha

Mark, High Wycombe, England

I own my money and will keep, invest, spend or gift it without further government interference, overseas if necessary.

Michael, Kensington, London

This is similar to a recent Economist article that, whilst not going as far as advocating taxing savers, also took the view that ordinary individual people should sacrifice themselves to help the economy.

As we have no real choice but to look after ourselves, this is irresponsible at best.

David Whittlesea, Hong Kong, China

I agree, this is an absurd and badly reasoned thesis.

It assumes that people will react to taxing bank deposits by profligacy instead of keeping it at home, dabbling in foreign currency or shoring up banks abroad offering sensible exchange rates. Anyway, who says people will spend to avoid tax?

Andrew W, London, England

Cut Council Tax. Increase JSA.
Ensure the economy is regulated fairly & properly and productive investments are made, not a casino to be apparently manipulated at will.

The value of money should not be materially debased without an election.

Deflation of some assets is unstoppable,relative others

Gobsmacked, London, UK

At least your columnist is willing to admit he is wrong within the text of his article. It strikes me as peculiar that free marketeers are so attached to the laws of supply and demand yet they now wish to subvert them as they apply to money.

R.MacGregor, Whakatane, New Zealand

Kaletsky is chief economist of a fund management company called GaveKal. 12 months rolling performance until September 2008 is -16.3%. In Jan 08 he said the credit crisis is "almost over". No wonder he is "encouraging savers either to invest in property, shares". What next-paid up member of Labour?

Chris, Hong Kong, China

If AK is correct, savings will be penalized but demand driven economics will restore prosperity? if he's wrong, supply side, savings/investment driven recovery will not occur and we'll all be in servitude to the State, having no choice but to pretend to work while the State pretends to pay.

Art, SF Bay Area, US

Perhaps those with £billions deposited with the government in Premium Bonds and cash ISAs etc through NS&I, should withdraw our savings and blow them on something we don't need and which is probably imported. Or is Mr Kaletsky speaking only of desposits held by commercial banks?

Maddy, Worcester, England.

This is one of the dumbest ideas ever. It would force people to withdraw their saving and keep the money at home. Therefore the banks would have even less cash and further bailouts would be needed.
Oh and it would probably lead to an increase in burglaries as more people would have cash at home.

With suggestions like this I’m surprised this columnist isn’t advising Gordon Brown

John, Coventry,

This scheme is not going to work. Taxing bank deposits would only result in people transferring their deposits into cash, to be stuffed under the mattress. Just imagine the bank runs that would follow the announcement of such a tax. You would have to tax money itself. That tax is called inflation.

Albrecht Ritschl, London, UK

u talk about non socialists believing your way of thinking to be best, but surely increasing taxes on peoples bank accounts to make them act in the way that you want them to act is the most socialist act of all? at least the tories advocate people being given the freedom to get out of their own mess

will, grimsby, uk

methinks mr kaplensky needs to understand what savers' money is. it is part of the capital base of the bank and they are supposed to lend it as sound loans and investment to businesses and individuals.
reducing banks' reserves and spending it on tv's and holidays is the way to salvation is it?LOL

neil c, windsor, uk

With all this cash going to be floating around under bedding and in home safes there is going to be some very rich criminals - i expect they are already rubbing their hands now waiting for all this cash to arrive at homes for a feeding frenzy.

Jules, London,

So taxing people and letting them decide how and when to spend their own money is "socialism" and houses are "productive assets" for the economy.

I see, Anatole...

Martin, London, UK

If believe what Anatole is suggesting is purely a short term financial stimulus. Whilst counter intuitive and highly unlikely the aim would be to incentivise (negatively as it happens) savers to redeploy cash currently held on deposit in ways which might jump start the stuttering economic engine

Carl, London,

The annual 5 bilion tax on private pensions seems to have destroyed them. Now it is the time to attack and tax private savings . It's madness designed to impoverish the rest of us with savings for our old age.

marc, Glasgow,

Savers- I am one myself who sold my house 2 years ago- are not innocent. Easy money means just that- it made it easy for people to borrow and spend, and that easy money made its way easily into the bank account of savers. We cannot save unless others borrow first. It is the paradox of thrift.

ian, slough, uk

this is the single worst article i have read on this website

neil, norwich,

Im not sure if the bit about taxing savers which would encourage them to invest in property is a joke or not. Lets not forget that its hugely inflated house prices and the resulting over-borrowing that caused this crisis in the first place. Reflating the property bubble would be disastrous.

Simon, Chester,

Brilliant. Then when people start taking money out of banks and stuffing them into mattresses, banks will fall below their capital reserve requirements and stop lending altogether. Simply brilliant. If only people were robots or mindless stooges, your idea would work as well as Marxism.

Wendy, Federal Way, WA, U.S.A.

At what point do the US and UK bite the bullet for the fiscal atrocities that have taken place over the last 10 years? Government monetary and economic policy appears to aimed toward preventing any pain resulting from economic turmoil. At some point, we will have to pay for our financial mishandling

Evan, San Francisco, CA, USA

Tax the savers? political suicide! Go for it Brown! If it does happen I will certainly spend my savings.The only tax I would pay is for the flight out of the country and spend it elsewhere.

Avocet, Edinburgh, UK

I would assume letting a Bank use my hard earned money to lend prudently to a business would be more beneficial to the economy than me drawing it out and splashing out on a holiday abroad. If I spend my money, I will spend it how I want, not how some lunatic politician wants me to spend it.

David Cook, Broadstone, Dorset

Savers are innocent victims of this economic crisis caused by irresponsible banks, inadequate regulation, and governments that have failed to prevent asset bubbles. Kalestsky's analysis is weak, crass and divisive. Keynes will be turning in his grave. Read John Redwood's article in yesterday's FT.

Philip Brown, Orpington,

looking into my crystal ball i see my house in 3 months time every room has not only a large flat screen tv but all the playstation etc i have a kitchen that is so full of white goods only the bnp aprove.but in this temple of modern spending i look with disbelief no food no gas no money many thanks!

david west, sheffield, uk

And who's going to support us in our retirement Mr.Kaletsky once we've spent all our savings?Future taxpayers I suppose.

Andy, Bristol, UK

Spend your savings on insulation, solar panels, a heat pump, anything that will reduce your carbon footprint. This will make your money work for you as it will reduce your long term outgoings. It will also stimulate new businesses in those areas and it will help to save our world.

sheila, Leicester,

In recent years, I've looked on in amazement as banks almost forced money they didn't actually have, on people who couldn't afford to pay it back. Many didn't need the items they spent the money on and now Kaletsky is advocating that the prudent be forced to pay for this lunacy. Unbelievable!

Maddy, Worcester, England

"Near-zero interest rates and even a tax on bank deposits"

Lunatic suggestion? No, not really.

They do this in the US and have done for a while.

S. Desai, Washington, DC, USA

I can only assume that this is satyrical !

Desmond Taylor, Houston, USA TX

i think the best thing to do would be to take my hard earned savings which i have been saving for less prosperous times and buy a one way ticket to a country that isn't quite as ridiculous as this one.

Steve S, Stratford, UK

This article misses one fundamental point: the role of banks is to distribute captial within the the economy. It is the fact that they not despite all that governments are doing that is the problem to be addressed not people having balances in their savings account. 0/10 on this one AK.

Matt S., Norwalk, USA

Spend, spend, spend is great while you have a job but redundancy is only a phone call away for all employees no matter what level or status they may have achieved.
AKs predicted BoE interest rate cut of 1% to 1.5% is however the correct action that should have been taken.

john, milton keynes,

Good idea. If we all descend further into debt to buy things we don't need then the Government will have to print ever more money to keep the Ponzi scheme going. My gold investments will go through the roof! But none of us will be able to leave the country as the pound will be worthless. Madness

Jonathan Bywater, Huntsville, USA

AK conveniently forgot to mention that the German Chancellor is a conservative. Tories are Marxists? Don't make me laugh. Not in Ken L's wildest dreams! AK shld broaden look at the writings of Hayek, Mises and even Freedman if he does not understand the dangers of fuelling this further

Patrick, Te Aro, New Zealand

If your main income is interest, then are you as 'feckless' as the borrowers who thought that house prices would only go up?

Mark, Bradford,

Right on as you are most of the time. The difficulty is to persuade people, as the main UK Opposition party has just not got it - with its county council mentality. Those who plan to vote Tory should reflect on the fact that they have been wrong on almost all aspects of this crisis.

david, Ligneyrac, France

A wise person once said 'doing the right thing while appearing to do the wrong thing was the mark of a true leader'.

malc, Reading , Berks

Barmy article by Anatole. Some of us have to save as our pensions will be rubbish through investing in stock market based financial products.

Ben Haworth, Norwich,

If everyone decided to remove all their money from the banks you would find by 10am the banks will have run out of money - we will have a Northern Rock situation. By nightfall the riots will have started in the streets and they will all realise how they have been swindled by this Government.

J H Wright, Derbyshire,

Since I was smart enough to save money for the last several years instead of spending money like a drunken sailor, how dare anyone suggest it is my 'duty' to help the economy that was ruined by government malfeasance, corruption, greed, and lack of oversight? Waving a flag in my face will not work.

SGA, Tampa, USA

"bank deposits and other risk-free savings".. that's a good joke for those of us with deposits tied up in the Isle of Man in a bank that Brown and Darling wrecked in their assault on Iceland.. Thousands of British savers are affected. Might as well put the money under the matress in future!

Nick Campling, Peterborough, UK

The cut in the interest rates do not personally encourage me to spend money in the UK but invest it in other areas [Gold/China that offer more security and a chance of capital appreciation.
Particular as the pound is sure to suffer as a result.

sam, london,

I was hoping to pay for a postgraduate course out of my savings. Now, with low interest rates, I will have to take out more of a Career Development loan from a bank than what I desire. How do I pay off the loan in an economy with no jobs, as opposed to paying out of my pocket?

Chris Williams, Pembroke Dock, Wales

What a brilliant wheeze.
All you voters now know who to vote for at the next election.

Sid Jacques, Durham,

'Unbelieveable and irresponsible' - the real market opportunity is selling home safes! This is one sector which would have significant growth?!

mark, Thirsk, England

The approach taken by Mr Kaletsky simply shows the difference between theory and reality If your only or your main income is interest, and you have no state benefit.you are stuffed unless you take on a more risky investment, and try to generate better income (have a look at the BBC website

Andrew Carruthers, Winchester, Hants

This is ridiculous. The reason the world is in this mess is because of excess borrowing and spending, and lack of saving. Easy credit has led to easy, pain-free malinvestment all around. Government coersion of more of the same is like a a cop forcing gin on a hungover drunk.

Tom, Eden Prairie, US

Anatole Kaletsky called the end of the banking crisis at varying stages during 2009. He fails to acknowledge that 14 years of growth was principally down to a culture of reckless lending and spending. In short, the growth was unsustainable. Banks will repair balance sheets with deposits from savers!

Keith Watson, Solihull, England

Right on Anatole. Saving's great in the long-run, in the short-run we're faced with demand/jobs collapsing, which will not be fixed by the consumer or the banks. We need government/the Bank to step in. Otherwisethe alternative 'natural adjustment' will be to a persistently lower level of employment

Martin, London,

The statist solution as ever from AK. Business bankruptcies and longer dole queues are necessary since those businesses and jobs should never have existed in the first place. They were born out of debt and will die because of it. Leave them to their fate.

Steve, Sutton,

Whats really happening is people are using any extra cash to pay off debts - the VAT give away did nothing and the base rate cut will do nothing.

We need to invest in the future - tax cuts, and favourable lending to companies who are in growth sectors - accept they will be some pain today!

mark, Thirsk, England

Anatole through the Looking Glass! The country is in a mess because some people have over-borrowed, so let us punish those who have not. If savings rates go seriously negative it will make sense to withdraw deposits and put the cash under the mattress. What will the banks do then?

John N, Kingston upon Thames, UK

I once read a description of economics as a miserable half-science. Anatole has just persuaded me why...

Tim Ware, King's Lynn, England

So borrowing is the right prescription...for what...PERMANENT DEBT for this, the next and subsequent generations...so that they can carry on buying cheap Chinese goods? I see you've joined in with the economic genii from New Labour i.e. fallen off a cliff along with the economy.

mark, Inverness, Scotland

Is this guy serious? Tax those who have not contrubuted to the massive personal debt this country is in to fund those who have borrewed every penny they can???

This is idiocy at its socialist greatest. THIS idea is socialism, not Cameron's!

Mike R, Manchester,

Spend it on what? If you've got a house, car, enough to eat, enough to wear, enough to pay your fuel bills, enough for your leisure, what else do you need?
I suppose you could fritter it away and then live off other people's taxes in your old age...

hhh, oxford, uk

And once all the savers have spent their money, where exactly does the money come from for the banks to lend with? The magic money tree??
This a county has been living on debt for far too long. It needs to end, the governments just neeed to let things be and let them take their natural course.

David , Harlow, UK

I've stopped saving and am instead making extra payments on my mortage. There are only so many DVDs, CDs, electrical items etc that I need. Sensible financial planning now means a bad person in today's topsy turvy world. I'm off now to get a credit card and blow the balance on festival tickets.

Mark B, Manchester,

People don’t want to borrow any more, not at 10, 5, or even 0%, when they are unable to pay back the principle, and with dwindling job security.
The world is readjusting itself to a level of consumption where people spend only what they earn, and save beforehand.
Why is this a bad thing?

rick, melbourne, australia

Barmy, there will be a run on all the banks and building societies and everyone with savings will install safes set in concrete and I suspect a similar security will blow any intruder onto another planet, it could also cause civil disobedience by the middle classes upwards unheard of in the UK.

Graham, cheltenham, UK

Now we know Anatole is in trouble. Please, no more silly ideas like this one. We arrived at this point through systemic profligacy. Now we have to sustain it by more? Let's just get the adjustment done, suffer the pain and reorganise ourselves. New government, too.

Colin, shrewsbury,

If people are encouraged to save, the banks will eventually have more money to lend.
If people spend, spend, spend, where on earth is the money going to come from.
NO ONE HAS ANY TO LEND.

Barbara, Hereford, U.K.

Most comments supportive of drastic govenrment action seem to implicitly assume that 2006 resembled a steady state and that bank lending is now the main obstacle to growth. However, in 2006 UK consumers saved 0% of their disposable income and Brown was running a deficit. Clearly unsustainable.

Richard, The Hague, The Netherlands

The US will break from the pack first, making it safe for the UK to follow into its slipstream. Europe will join in after it has been lapped.

John Scott, Gateshead, UK

Rubbish! It is the money saved in the banks and then loaned (responsibly) by them to viable businesses which will create jobs. Government spending is usually sterile and consumer spending ephemeral. Labour politicians simply do not want to understand this, hence their absurd pastiche solutions.

Richard Cooper, Dunstable, UK

Why should those who provide for their retirement sensibly and adequately have to bail out spendthrifts and foolhardys? Spending a way out is a ridiculous notion, especially as the government is doing it for us. More than ever you're gonna need your savings to fund the governments spree!

Phil, London, England

Without depositors the banks have less to loan to the borrowers. We need each other for this theroy of borrowing to stimulate the economy is to work. In addition, the consumers not the governments will get us out of this. The less government the better.

Dale , Bourbonnais, United States

Kaletsky clearly isn't an economist. If returns on savings becomes zero, people will withdraw money from banks causing a run. We've seen what bank runs have done to market and consumer confidence. If they save, banks have a firmer deposit base they can use to lend to business, helping growth.

Daniel, London, UK

I'm not going to spend anything now. Before, I could draw on my savings, knowing that I could still earn interest on the rest. If I use them now, they will be gone and that will be that. Also, I refuse to use my resources to buy into this disgusting, unfair system.

K John, London, UK

I am 56 and have increased my monthly savings from 35% to 40% of gross income to build up my pension fund because of lower rates. I am free to move my cash savings into another currency until the UK recovers and job insecurity makes everyone more cautious - it is about more than fiscal policy.

Sykes, Hudderesfield, UK

This is a great news for mattress makers. When savers get nothing from their savings they will withdraw all the money from their bank accounts and hide it in their mattresses. Matress makers will then be able to market a new type of mattress with special invisible pockets.

Rastus C. Tastey, Dinan, France

I'll spend, spend spend. But would you like to pay off my credit card bills or answer the (inevitable) threatening letters from the credit card companies? Are you suggesting the person in the street is plunged into an ever-increasing mire of despair.

G Tebble, Sheffield, UK

So the economy is going to depend on undirected spending for the sake of it. How soon will that novelty wear off? Those now with plenty of cash to spare - where will they hope to save it?

Dennis Wills, Porstmouth, UK

If the government started to tax my savings as Mr Kaletsky suggests, I would continue to save though not in banks. I would keep my hard earned cash under my pillow.

Bulent, Sheffield, UK

If governments make it hard for savers, then all that will happen is that the money will find some other home abroad.

Ofcourse government could simply nationalise savings accounts. Problem solved.

DaveP, Beverley, UK

We live in a global village, at a moments notice and with the click of a mouse button my money sitting in a UK bank can suddenly be sitting in a New Zealand one Mr. Kaletsky. The same, or similar, applies to millions of others with accounts in more than one country. Or hadn't you thought of that?

ian, Auckland, New Zealand.

Is it April 1 already?

DaveP, Beverley, UK

The best way to increase spending is to significantly reduce income tax. To off-set at least some of the cost VAT should be raised. The reduction in VAT was a headline grabbing farce.

Tom, London,

The UK level of public debt is critically dependent on discount rates applied to future elements of the debt such as public sector pensions. The government continually underestimates the effect of these elements in order to provide reassuring figures of UK public debt level.

Stuart Greenhalgh, Stafford,

In the most succinct and military term, Mr Kaletsky, kindly 'Foxtrot Oscar!' - I'll use my money in the way that best suits me - or not!

Trevor R. Booker, Brightlingsea Essex,

In addition, there is already a tax on savings: it's called the capital gains tax, and is largely on the "proceeds" of sheer inflation.

lidia, Siena, Italy

There is so much wrong with what you've written I don't know where to begin. Long story short, if the bank rates go to 0% I'll be putting my money in a safe. At least that way I'll be able to keep it and not be losing 20% a year in some other non productive Ponzi scheme such as property or shares.

Andy Hardy, Brisbane, Australia

I feel dumber for having read this.

You seem to think the people that blindly lead us into this mess now have the ideas and the means for getting us out.
I think you should rather be looking at the Austrian economists who predicted this, as they have the vision and the ideas.

Frank, London,

Even if money is 'lying around in some bank account' it is being used by the banks to support industry etc. The writer of this article admits in it that he does not know what he is talking about. I am not sure how much control, in fact, anybody or politicial party has over the situation.

John, Ashtead, England

My parents worked hard, bought a house and saved. They are now both in care at a cost of £5k a month which is £4k more than their total income. The interest on what is left of their savings and the proceeds of the house sale is helping to stave off the day when they have to rely on the state.

Ian, Bristol,

This is very misleading. Savings rates with Tesco are 5.1% (presumably to move down to 4.6% now) and even NS&I offers 2.7% on income bonds. If it went below 1/2% I would take all my money out but I would not spend it.

Michael, West Midlands,

"But what I think is of little importance, especially as I have been wrong about so many aspects of this crisis"


Indeed -about the only part of this article that made any sense-sorry but I doubt that I will ever be able to treat you serioiusly ever again after reading this nonsense.

Ian, Stirling,

I was prudent in the "boom" years when all the froth and rice krispies were being pumped into the economy. I paid off my debt and then I saved. I'm not about to start spending unnecessarily now!

Prudence Brown and his like need to start thinking seriously about alternative capitalist models.

David Howdle, Dundee, Scotland

Economists can't cope with unmeasurables like confidence and extrapolate lower interest rates into negative rates on savings. Pensioners will live off their capital gradually and not invest in shares. The article addresses the wrong problem: the credit crunch Anatole, solve the banking rigor mortis

Steve, Northampton,

Money doesn't 'lie around' in bank accounts. Banks use it to lend, productively, to private and commercial borrowers. Where else do you think the money that is lent comes from?

Wily Trout, Nottingham,

The problem in the economy is there is no cash available to finance growth, even for wise investments and responsible borrowers. However, we who have money need to invest it wisely and not just spend. Banks normally are better at this, but they operate on trust. If they won't invest, we must.

Robert Thomas, Fort Atkinson, WI, USA

What an excellent idea - i can spend my hard-earned savings ear-marked for a deposit on a property and continue to live with my parents until i'm 40...and all thanks to the disgraceful actions of the banks who lent to every man and his dog during the "good times".

Richard, Littlehampton,

I come from a family which had to 'borrow our way of debt'. 20 years on that debt still haunts my family. It is a miserable way to live leading to a very insecure background to my childhood. Borrowing is not an easy alternative and is not the answer.

Angela, Cambridge,

Housing is not a productive asset. Last time I looked at my house it was costing me money to maintain and losing value. Houses (unlike [shares in] companies) do not produce anything.

Judith E, London, UK

"would create a negative risk-free interest rate, encouraging savers to invest in property, shares and other productive assets"

Since when was investment in property an example of a productive asset? Yes, a house provides a service, but investment in pre-existing property just reduces the yield.

Brendan, London,

Oh dear, this article seems to have awoken all the Chicken Littles out there. Newsflash. 'Spend' does not only mean go down to your local Dixons and splurge. Spend really means use - as opposed to leaving it lying around in some bank account. By "using" your money we can prevent a deeper recession!

Iheke Ndukwe, London, England

I use the interest from my hard earned savings to help make up for a low pension. I wouldn not spend more if I was taxed. But I would spend my savings instead of interest. The advantage to me would be that I would then be entitled to Government benefits. Maybe not such a bad idea.

George, Manchester, England

What the heck? Are you kidding with this article? Too much easy credit is how we got in this mess. More credit is not going to fix it. Why do we need to "fix" it anyway?

Bob, Sf, USA

Have you considered the vast amount of individuals may just start saving abroad in Euros, Yuan and Rupees ? Or would there be a exchange rate tax as well ?

A Banerjee, Newcastle upon Tyne, Uk

tax people for saving??? absolutely insane. political and economic madness. even kafka couldn't come up with that. brown does that and he can kiss goodbye to a labour govt.

stephen, china, china

The level of taxation and interest rates now is encouraging spending not saving. If you increase taxation all that will happen is that investment will stop. The cash funds are used by banks etc to fund capital investment so the argument is rubbish.

hesperus, Oxford, England

AK, the Labour government wants us to have nothing & be utterly dependent on them. As a result nobody has a "choice" anymore. The whole housing thing was a false bottomed investment bred of a bank designed 'Boom & Bust'. Your plan will put everyone onto the 'dole Q'. What then, print more money?

C.Brooks, Khobar, Saudi Arabia

So, prudent savers must be punished to help reckless borrowers and spendthrifts.
Astonishing to see how little morality remains in (at least one) UK political economist and in the government.
Buy gold and stuff them all.

Cyril Berkeley, Kuala Lumpur, Malaysia

An unbelievably terrifying idea, let's hope the non-Marxist Labour government don't read this article, it might give them ideas.

Ellie, England, uk

Actually John from Durham, maybe this is a good idea after all! If everyone ditched the Fiat paper in lieu of hard assets no govt. would be able to use the stealth tax of inflation again!

John Smith, Cambridge,

The longer term effects if savers spend? When they become care-dependent in their later years, the state has to cover the cost unlike the present situation whereby savers apparently put aside money to cover the cost of care for themselves while we provide free health care to the world and his wife!

Paula, Warks, England

This is the funniest thing ive read in ages and it appears that Anatole has a similar amount of understanding and thought as our illustrious leader.

Tony, York, UK

Yeah right. Get all the savings out of the banks, just like Northern Rock. What can i spend this money on to help the british economy? Every service provider is foreign owned and every product is made abroad. Massive debt on over priced houses is what led us here. Throw bad money after worse?

Jason, Woodbridge,

This is ludicrous. I am unemployed and am not eligible to claim JSA because I have savings. Now, assuming that I heed the government's call to spend all my savings, I will be pennyless and become a JSA claimant,a liability to the government, I struggle to see how this will help.

Sophie, Reading,

The point here is that as someone who has sold their house at a profit and kept that money in risk free ventures I am waiting for the correction in investments prior to reinvesting. This is an essential part of capitalism. I would rather not help out the masses with my hard cash.

John, Egremont, Cumbria

Surely the best thing for savers to do is to continue saving so that banks have funds to lend. The whole point is that banks have insufficient funds to lend because, as a nation, we do not save.

Helen Pope, Nottingham, UK

I only have 50,000 which took me ten years of hard work to save. What do you suggest I do? Just throw this all away. My aim was to save a deposit for a house but that is still out of my reach in London. Shall I just spend it all on worthless consumer goods which I can't eat or sleep in?

Rachel, London, UK

That's it, I'm going to set up a safe-building company. This country needs more manufacturing to take place and judging by the comments if what's written in the article ever takes place there will be a considerable demand for my product.

Try to tax my savings and I'll just put my money in a safe.

Louise, Bradford,

I find it difficult to believe this comment. The reason that the UK is in such a dire financial situation is that the fundimentals of the ecconomy are wrong. It is based on borrowing money to buy imported goods. The UK has not been spending earned money on goods made in the UK. It had to end.

Alistair G Scott, Blackburn, Lancashire

These policies will lead to hyperinflation and the utter ruin of millions. If you have paper money, change it into gold while you still can.

Andrew, Brampton, Cumbria

What bizarre Brownian logic ! oh and after forcing everyone to spend what they have saved and nobody has anything left, how do you sustain this 'magic spending' boom to keep your socialist mirage afloat - or do you subscribe to the old Gordon chestnut that 'recovery' will somehow pay it all back ?

Bryan, Totland , UK

Anatole's argument assumes that we'll have long term deflation. However, if the government prints money in order to fight deflation, then we may find we have inflation sooner than we think. That will be punishment enough for savers - many of whom saw the 70s inflation destroy their parent's wealth.

bill, Madrid,

What do you consider productive spending - buying plasma tv? The excessive spending and borrowing of the last 2 decades can not be solved by more borrowing and spending. Fundamental changes need to take place where savings are encouraged to invest in production and innovation not consumption

Hamish, Melbourne, Australia

You fail to mention that Britains personal debt is already the highest per capita of any nation and that the governments debt was headed in the same direction even before recession - if we were saturated in debt during the good times what moronic reasoning says building up even more will save us now

Bryan, Totland, UK

This is the worst economic thought ive ever heard.It would DESTROY the economy.Tax savings below minus would destroy a FIAT currency because there is a real wealth holder.GOLD.If this happened everyone would buy hard assets ie GOLD with their paper.The currency would collapse to be worth nothing.

John, Durham, Durham

Near-negative or even negative interest rates eh?
Presumably at that point, the "lucky" winners on their Premium Bonds will receive not a cash prize but a cash demand?

Phil Moger, York,

Unbelievable! Forcing an individual to use their savings to support the bursting property bubble is as ridiculous as forcing people to sell their houses to support the dot.com bubble. When the govt screams "spend" and penalises savers to save their own skins, hang in there. Out of debt out of danger

Phil-S, Alfreton, U.k

UK savers do not have to save in Sterling, or even UK institutions. Most foreigners do not need to hold Sterling, and the yields on 30 year gilts are ticking upwards just when the government hopes to borrow a lot more. A cut in rates is just going to give us all less reason to save in Sterling.

Paul, Tenbury Wells, England

If I get no interest on my savings - and taxed to boot - then i'll just take my money out of the bank and keep it at home or buy gold... At least you wont have the worry of the bank going bust!

John, Glasgow, UK

I think all those in the banks who received huge bonuses over the last few years should have similar sums confiscated from them by the Government. It was 'reward money' but it got us into the mess we are in. This money could be distributed to those on the min wage who would undoubtedly spend it

Mary, East Yorkshire, UK

It has evidently not occurred to the author that savers can withdraw their money and put it in a deposit box/foreign currency/under the mattress if faced with a bank deposit tax. Massive withdrawal of savings from banks would of course result in huge drops in lending. Some 'stimulus'.

Dave, Hackney,

The concept of excess lending and borrowing needs to be dropped. The best way for that to happen is to increase interest rates for a while. The last 10 years has been a mark-to-market mirage of borrowing profits from the future. Reality has to reassert itself - let's not prop up this nonsense.

Ron, Singapore,

As I read this article I thought it must be April 1st!

david franks, chonburi, Thailand

Excellent idea. The USA and UK should continue to take money off the productive and intelligent and give it to those who are not productive and who have failed. Assets rise and assets fall, this will allways happen. Learn your history, these problems are not different this time.

Jamie, Cardiff,

I've worked hard the last six years to build up my deposit to build a house. I'm already slugged each year with a high marginal tax rate.
Health premiums, education fees, council taxes, etc maybe as a tax payer I should be polishing the shoes of politicians and bailed out bankers and feel privileged.

Martin, Sydney , Australia

It sounds like you are up to your neck in debt, pal. That still isn't a reason to bankrupt the country too.

Lorne, Ayr, Uk

We're not spending because we have either lost our jobs or are in danger of doing so and want to make sure that we don't lose our homes and families due to lack of money.

Forcing the population to gamble all that on the hope that spending money will save their jobs and homes is madness.

Chris, Beckenham,

Interesting ideas you present. I might have this wrong, but don't people need to build a large level of savings to buy a house these days? I've heard figures of needing ever higher deposits to get a loan in the current climate. If people don't save then it is hard to see how houses will sell.

Simon, London,

"So your idea is to tax the financially prudent. Are you mad? What Government would cut its own throat by doing this?"

The Labour Government, of course, who else!

I laughed all the way reading this. "Marxist" Tories, "productive" real estate speculation - that's hilarious!

Igor, Belfast, NI

A recession is the natural consequence of the artificially induced boom we have had over the last 10 years or so. Plenty of commentators have identified the political drivers that encouraged that debt and public spending fuelled boom.

Robert, Tokyo, japan

"The beauty of such policies in a world of zero or near-zero interest rates is that they are effectively cost free."

Aren't long-term interest rates (bond yields) somewhat higher than short? And if the gov't borrows short-term, won't rates likely be higher when the debt needs rolling over?

Tim, Cambridge,

No mention of the inflation tax that we will all have to pay in the future as our pound is worth less as a consequence deliberate monetary inflation.
Still he got one thing almost right namely what he said was of little importance.

david, brighton,

I am unemployed, I saved while working so I get no benefits. All my money is in various bank accounts. There are zero investments avalilable, only speculative gambles on correcting markets that pay no dividends and only 2% net on property. What sort of 3rd world nonsense is this your advocating?

Steve, London, UK

Superb idea....bring it on!..those who say this is silly, have no idea whats happening out there. This isn't a correction as such or any other fancy economic capitalist deleveraging, whats happening is highly dangerous and disturbing and threatens the very core of society as we know it ..go for it

John, Belfast, IRELAND

Is this man insane? He seems to forget that 'confidence' and a feeling of 'competence' is required NOT bullying tactics. When we feel that the Government know what they are doing then we will spend until then...dream on!

Billy, Bangkok, Thailand

So your idea is to try and reduce the Capital base of the banks so that they have even less ability to lend. How does that help a Credit Crunch. We are in this mess because the banks are undercapitalised and will not lend money.

Where have you been for the past six months?

JW, notts, UK

pure insanity. if people use up all their savings to support our smoke and mirrors economy, how much money will the government have to borrow on our behalf to look after these people for the 30+ years of their pension? take the hit and rebuild our ecconomy, use this cataclysmic folly as opportunity

wil, grimsby, uk

How is it that you conclude money saved isn't being used productively? The whole point of the banking system is that savers' money does not sit in mattresses but is used as lender capital. This crisis arose around bad household debts and was fueled by lenders' low reserves: long live savings!

Adam, Cambridge, UK

I hope this comment gets published because this is the reality. The previous comments seem to be missing the point. This is what will happen, you will spend your savings and you will enter the property market, you will invest. If you don't there will be many that do. Its economics not personal.

Gavin, Ashby de la Zouch, England

I see the vested interest doom-mongers have been hard at work, posting away in a frenzy. BTW, the article is linked to from the housepricecrash site, so no wonder the comments are all so negative. The article is 100% correct. The country has to start spending again. Savings create no real wealth.

Gaz, Edinburgh, Scotland

Bonkers. Banks disparately need to improve their capital positions (remember those bailouts?), and reducing savings is not exactly going to help that. Did you hear about the credit crunch?

Rufus, Bucks,

Kaletsky is mad. If rates fall to 0% or -ve then everyone will just withdraw their savings - causing another NR style bank run - and stash them in a home safe. The correction is overdue and needs to be left to run its course - let the asset values collapse then people will buy again. Bring it on!!!

Steve, London, UK

Ooooooh Anatole ! You've opened up a can of worms here. You've combined sensible comments with some new crazy ideas. Computer models would be needed to unravel your complex theories. Why on earth encourage people to spend their hard earned savings on things they don't need ? A black hole beckons !

John Fisher, Edinburgh,

The above article looks like a great reason to buy gold.

tony, wallsend, uk

what utter drivel, without savers the banks have nothing to lend...you have been consistently wrong during this crisis, when are you going to realise supporting this governments attempt to cling on to power is a lost cause. Printing money will lead to hyper inflation.

john locke, La Rochelle, France

My cash is stuffed in my mattress. Any cash I get my hands on will also be stuffed in the mattress. Nobody gets to spend my money, not even me.

john , surrey,

I see that the question has already been asked but I would really like to know what makes property a 'productive asset'.

Steve, London,

What nonsense. I would rather take my money out the bank and keep it in a safe, rather than pay interest to support the banks who are responsible for this mess.

David Bachauer, Manchester , UK

Is it April 1st?

Barry Smith, Streetly, UK

Government and Local Council spending should be cut by 50% over the next year, right across the board.
Let the people decide where the cuts should be made.
The glut of empty stores should be converted to small local workshops. The glut of empty Council Office property should be soup kitchens.

stanno, Bristol,

So your idea is to tax the financially prudent. Are you mad? What Government would cut its own throat by doing this? You want to force me into investing in shares - that might be worthless tomorrow if the company fails? We're in this mess is due to the debt built up by banks and bad risk borrowers..

Andrew Jones, Wrexham, UK

But spend the money on what? Thats the nub of it. What's the point of throwing good money after bad? The market is telling you that it no longer believes a lot of what has passed for "productive investment" is actually worth investing in anymore. Thats the problem. No one trusts the analysis.

Paul Galbally, Carlow, Ireland

You have to be joking, even the off-spring of a village idiot and a weather girl wouldnt consider what you are suggesting.

Its not a recession its a correction, the last 10 years have been false and reality has struck, there is no way back and the longer it takes to face it the harder it will be.

Peter, Aldershot, UK

With the greatest of respect that was one of the silliest articles that I have ever read.

CHARLIE, LONDON, United Kingdom

If you will guarantee that I can live my old age in comfort, then I'll spend my money on consumer goods, which I neither need nor want , to "save the economy." Until you're willing to do that, hands off my savings!

Jane Allen, Keighley, England

I've saved for years so that one day I can buy a house for my family, and you want to punish me for not spending to save the greedy, the profligate and the stupid?

I'll invest in property when it stops plummeting. What fool advises those with savings to invest in a rapidly depreciating asset?

James, Sandhurst,

Borrowing may be cost free but the money still has to come from savers somewhere. If all savers withdraw their money, what state will the banks be in? Will all governments be able to raise the money they need in 2009? Or will they just print it, and cause hyper-inflation in a few years time?

Ed, Oxford,

Just the opposite of what you say needs to be done. At least you admit you are usually wrong on these issues. What needs to be done is to get away from the mantra of growth or bust. Sustainability is needed with proactive policies rather than desperate reactive measures based on false economies.

Corbo, Norwich, England

Its difficult to find anything sensible to say about this suggestion. Just out of curiosity, what happens when all savings have been spent? When does the Country start to pay back debt, considering most of it has been created during the boom, the time Keynes suggests it should have been payed back?

Graham, Harrogate,

When house prices have halved to a more sensible level I will use my savings to purchase one.

I will by doing the above have more cash available to use productively than anyone who entered the ludicrous housing bubble post 2004.

This government insists on making matters worse with bailouts

David, Marlow, Bucks

I cannot believe I am reading this nonsense. At first I thought it was a joke. Taxing savings so people "save less and consume more"!? Isn't this complete lack of planning the reason that everyone is so heavily in debt? Why punish the people who have been sensible enough to save for the future?

Jon Sumner, Leeds, U.K.

Complete Tosh.

Tim Ware, Amersham, UK

You cannot keep filling holes with money created out of thin air.

Now our bogus wealth creation economy has been exposed. There appears to little real weath generation potential in the UK.

Tom Brewer, Slough, UK

How is property a productive asset? Indeed even shares are not productive, the only things which are productive are people. Assets are overvalued with respect to the cost of labour, what we need is increased interest rates to prick the asset price bubble as soon as possible.

Dave, Liverpool,

And what would the impact of this lunatic suggestion be? Firstly it would drive many many retired people, who rely on the interest from their savings, into penury.

Chris, Ashford, Middx, England