Is it squeezing the budget too quickly or delaying doing so for too long?

What, exactly, is the greatest risk to the recovery asks the BBC’s Stephanie Flanders.

Labour thinks the danger lies in squeezing the budget too quickly, before the economy gets back on its feet, rather like in the US in 1937 when premature tightening helped make the Depression a lot deeper, she says in her online blog

For the Conservatives, it’s the opposite, by delaying cutting the budget the UK will lose market confidence, warns Flanders.

Vince Cable, the Liberal Democrat economic spokesman, said: "Delaying action on the budget risks a secondary infection: a sovereign risk crisis leading to higher borrowing costs. But treatment that is too abrupt - sending off the sickly patient to do 200 press ups in the gym - risks a fresh heart attack: a relapse into recession. Treatment has to reflect the patient's condition."

Flanders sides with Cable and says there is too much uncertainty about the recovery to be able to predict with any certainty what economic policy will be in 2010 and 2011.

When the FT asked 71 top economists whether they thought the government should tighten the budget this year or leave it until the next. Thirty-one said wait, notes Flanders’ blog.

But, she adds, nearly early every emerging market debt crisis of the past 100 years, have come from governments putting off the day of reckoning for too long.

BBCs Stephanomics blog