The debate on how to manage demand-side macroeconomic policy has been going on since Alistair Darling came up with Labour's deficit reduction plan. The Coalition government have decided to reduce the deficit faster and further than Labour wanted to.
The issue debated is how much support Britain's fragile economy needs to return to growth and how much damage increased levels of public debt would do.
Labour, on the whole, take the view that the government should be doing more to ease the short term pain of low growth, high unemployment and the danger of a new recession. So they urge a slower reduction in the deficit with the government doing more to boost Aggregate Demand.
The Coalition take the view that long term growth is more important and the burden of debt could reduce that significantly. They also point to the debt crisis in the PIIGS and say that creating such a debt crisis would be much worse. So they are happy with a lower stimulus to AD (it is still significant given the government deficit deficit) but the prospect of more secure long term growth.
You will find that differnet newspapers will take different views on this and many other issues. The Daily Telegraph is a supporter of the Coalition Policy and so run stories largely sympathetic to the government strategy. However the Guardian and Independent will be more critical and sympatetic to Labour's view. It is important you recognise bias when reading stories and stick to the economic, not the political, arguments.
The two stories below illustrate the sublte (sometimes not so subtle) differences when reporting the Chancellors speech here. Compare and contrast.
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