Ultimately, a return to sustained growth in private sector demand that can accommodate desired private savings is essential. An open, global economy centred on private risk taking is the best prospect for this. But before that can be assured, much needs to be done, starting with an orderly retreat of the public sector.
7  Ricardian equivalence refers to the theory that increases in government spending are largely offset by reductions in private consumption, reflecting future anticipated tax increases. 4  BIS Review 73/2009  Redistribution of risk between public and private sectors The financial panic required a bold response from the public sector.