Stiglitz is left wing only relative to the right wing Voodoo economists of whom you seem to approve so highly despite the complete lunacy of their approach.

You – and Stiglitz – both labour under the misapprehension that creating public credit (aka QE – which is NOT a debt instrument) is somehow wrong when governments do it, but quite all right when private banks do it -as they have for 300 years, ruinously. The problem is that private banks have become accustomed, when times are good, to outrageous management pay and huge dividends to shareholders to the cost of credit (system costs and default costs), thereby inflating the price: when times are bad, the public sector has to stand behind the banks and bail them out, socialising the losses, as investors and management count their privatised profits.

Governments can and should create the public credit necessary for the creation of public and private productive assets – such as affordable housing, renewable energy and new public infrastructure – and guarantee its performance, for a fee.

This process should be the subject of sound financial management, as you say, possibly by banks as service providers (rather than credit intermediaries) provided they have a stake in the outcome.

Just because money=credit is being electronically created (‘printed’) does not mean that it is necessarily being lent or spent into circulation. As we see, it isn’t.

QE as currently pursued serves to keep financial asset prices pumped up for the benefit of the already wealthy, albeit with the useful side-effect of preventing the economy sliding into the deflation and depression which would be the inevitable result of the Voodoo economics you advocate.

His comment about the BOE continuing to buy Gilts is to some extent true. But he is being obtuse at best if he doesn’t realise what the endgame to that is – higher rates (through inflation, risk repricing or a currency crisis. Or all three).

Printing money is no substitute for sound financial management, and Stiglitz should know, as a Keynsian, that Keynes’ only advocated deficit spending in a closed system using money from budget surpluses won in times of growth. Given that Brown was overspending heavily even in times for growth, it’s no surprise that now we have a massive budget deficit, which is threatening confidence in the UK.

Rating agencies don’t really matter – not least because they are always reactionary and backward looking. If the UK gets downgraded, the market will have led the way and it will be too late already.

So whilst Osbourne might have his argument a little mixed up, he is still essentially correct. If we continue to go on as we are, we could easily end up in a situation like Greece (who have a smaller budget deficit and debt/GDP ratio than the UK) or worse still (continuing down the QE path) Japan, who have had low rates and almost no growth for 25 years.

The most vibrant and fast-growing economies in the world all have something in common. Low deficits and smaller debt stocks. High deficits mean high debts mean high tax means lower growth in the future.

It has to be repaid. Why can’t people understand that?