Reduction in Government Spending

So Labour has decided to cut their spending levels after much controversy of them wishing to continue to increase their spending to try and spend their way out of the Credit Crunch. When one thinks of this fact, one should only look at the fact that the Government has spent so much money on bailing out these large Financial institutions. Billions of pounds have been poured in to the banks to allow them to lend to each to each other more freely, which is the only way that confidence will grow in the Economy. Without confidence, consumption levels will remain low and the UK's Aggregate Demand curve will remain shifted inwards. Has the confidence improved? It is true to say that mortgage approvals are on the rise and the FTSE has risen above the 5000 mark for the first time in a long time, although the mortgage holders which paid back £418m more than was lent in home loans during the month as cautious consumers and strict lending criteria kept net lending low, contributing to a mixed picture of the property market.
Labour must realise that it only has until December to sort itself out. I believe that increasing spending is the only way out. Even though the borrowing deficit has reached an eye watering £175 billion, it should look at the ForEx markets and notice that it is working. For example, against both the Euro and the US Dollar, the Pound has slowly continued to strengthen since May and this is positive news for the Economy and it shows the methods of increasing spending must be working.
I must stress I am not a Brownite or a Blairite (infact I am a Lib Dem supporter) and it is likely to be that the Conservatives will take power, but I must stress that if Mr Brown and Mr Darling (who have been unfairly demonised by the press) want to keep their dignity, they need to continue with their spending, even though it will probably be unpopular. If it is to be the case that Cameron takes over as Prime Minister, he will realise that he will need to as well (at least until we are completely out of recession).
I will write my next post within the next week on another issue which has made the news. I wish the best of luck to Chelsea as they face Tottenham Hotspur on Sunday and England Cricket as they attempt to restore a tiny bit of pride and gain some sort of confidence ahead of the Champions Trophy against Australia on Sunday. Goodbye and have a good weekend.