A general election must be held in Britain within the next eight months. From now until the votes are cast is a time of great economic risk, a period in which the government has the opportunity to boost demand in the short run to encourage voters to feel good, knowing that any inflationary whirlwind which results will not hit until after the election. Just before the 1992 election the Tories, as so many governing parties have before them, succumbed to just such a temptation, cutting taxes and letting spending rip. In subsequent years they paid a heavy price for that, as did the electorate. The government had to push through hefty, and highly unpopular, tax rises. Nevertheless, that was then, memories are short, and the Tories are far behind Labour in the polls. Temptation beckons again. Will the Tories again succumb?
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