From Paul Krugman-The conscience of a Liberal.. May 13th 2012 9.22am.
"Eating the Seed Corn.
Jonathan Portes is angry, and rightly so. He points out that the Cameron government is systematically starving public investment.

Public sector net investment (%of GDP) v time (2008 to 2014) follows in the article.

There might conceivably be a justification for this policy if Britain were facing an intense cash squeeze. But it isn't-it's able to borrow very cheaply, with near zero interest rates even on long term borrowing.
And given that public investment is, you know, productive, this is almost surely a case of self-defeating austerity : by shortchanging infrastructure now the Cameron government is saving only a trivial amount on interest payments while reducing long-run growth and hence revenues.
The fact that this passes for responsible behaviour is proof the lunatics are running the economic policy asylum."
Do you agree or not?

There is a chart in Krugman's blog here:

The Cameron Gang Slash Public Investment

Public investment is productive ? No most government capital spending is wasted. e'g NHS systems,

Building roads, railways, schools, hospitals and such helps people get to work, helps businesses move goods, helps provide an educated workforce, helps keep the population fit. This is useful public investment. Whether it is always spent efficiently is another matter.

Public investment is made via private companies which leads to the creation of jobs and profits. Cut public investment and private companies have lower profits and employ fewer people. Hence a fall in public investment is bad news.

Perhaps those who hate the idea of public investment would prefer to have only fee paying schools, fee charging hospitals and GPs, toll roads and turnpike trusts or maybe pack horses? Perhaps they would like to move their manufactures by canal barge? After all canals were built by respectable, purely private investment.

After all, public investment is shocking, disgusting and immoral. Ask any senile fascist.

Cannot help wondering where the growth in the current climate is going to come from.
Not from exports with the EU in deep trouble.
Not at home.
Not the bottom income group at the sharp end of cuts, killing off their high propensity to spend effect.
Not middle income UK with job losses and job uncertainty.
Not small business with their funding problems.
Not big business, preferring to sit on their cash mountains and wait and see approach.
Not banking/financial services with their job losses and problems.
That just about leaves the Government to spend and invest in the hope of kick starting the economy.
The real problems are best summarised in the in income distribution such as Pen's 'parade of Dwarfs' with their matchstick people, and the Lorenz Curve which keeps bending out more and more from the straight line.
i.e Those who want to spend are getting less and less to spend, those who do not need to spend are getting more and more income.
The net effect is lower aggregate demand and more and more recession.