Vince Cable talking to Stephanie Flanders, discussing what to do if the tuition fee cap were lifted to £10,000, says

"We do have to be realistic . . . we can't simultaneously promise free education for everybody and then have unrestricted access. One has to choose - either wide access for which there is co-financing or else you can have free tuition but for a limited pool of students"

Yes.  And, in my silly old economically liberal way, I tend to regard the quantity rationing as illiberal (think Soviet bread queues) and price-rationing (even though heavily deferred and subsidized) as the best way to retain individual choice.  I wonder which kind of students would lose out if we had strict quotas in terms of undergraduate numbers - the poor or the rich?

Vince has also inspired some hostility at the IEA, who straightforwardly loathe his call for fairer taxes. I have taken issue with their mythologising about the level of taxation in this economy, which they put at 'nearly 50% of the national income'.  Um, only 15% out.  The kneejerk cry for "innocent" taxpayers to be let off the task of paying back the debt is covered in more detail in "A balancing act". 

I believe in balance.  So this is a piece by the Taxpayer's Analysis - or really the CEBR - about how raising taxes will not work to fix the deficit. However, looking more closely, it seems to find that

 - if growth falls below projections debt will be worse than projected (not that surprising)

- they don't like the £150,000 tax band, think it will not raise money (well, neither do we)

- revenues like corporatation tax hurt growth (yes)

- "Increasing indirect taxes like Value Added Tax may have less impact on the supply side and therefore could increase revenue over the short and medium term" - we call for a VAT increase too

The major difference between us is on the subject of the macroeconomic consequences of spending cuts in a recession of this nature.  They write:

"It is not the case however that reducing government expenditure by £1 will reduce GDP by £1. Some of the funds that the private sector would have spent buying government debt can instead be spent on consumption and investment."

I think this is straightforwardly wrong in a pre-Keynesian way.  It is wrong in the same way that people are wrong who opposed the stimulus on the basis that if the government spent the money, then a chunk of a finite fixed lump of savings that would have gone on private investment is taken away, and all you get is a more government-dominated economy.  As Krugman points out, the "savings" part is endogenous, not exogenous.  Without the stimulus, savings is brought to equal investment by a fall in the iincome from which the savings are saved.

So if the government did not borrow to spend, the result would not be a private sector gleefully spending the money on some other scheme.  Instead, said private sector would observe lower future demand for its projects, adjust investment plans accordingly, income would fall . . .  it is better explained elsewhere (try Keynes, but even more Andy Harless here)

Megan McArdle links to some research that you can't inflate out of debt. My view is that you shouldn't, but surely you can? Britain's experience suggests as much.

This time last year I felt a bit foolish for banging on about the value of central bank independence. Well, yes, I did misread the economic situation, but my basic view stands: inflation is desperately difficult to weed out, and should be avoided.  Now I am glad that the FT has caught up.  Ron Paul has made this a live issue in the US: six major economists disagree.