You might be forgiven for wondering what has happened to all that cash. Perhaps it has been used to build some new hospitals without mortgaging our future with a PFI contract? No. Has it then been used to invest in new schools so that the 25% of children in Bradford who go to a second choice school have better options? That's not it either. Nor has it been used to help invest in science and technology to prepare us for an energy efficient future and to help industry and commerce to recover and to fix the 6% deficit in our balance of payments.
What they have done with this cash is to pump it into the banking system to try and ensure that the banks remains solvent. That means £375 billion of easy money has gone to those who created our financial problems whilst those who were not responsible for them such as nurses and teachers have been told there is no money.
Give the Bank of England its due. This extravagant expansionist policy is working. It has prevented a collapse in the banks and has paved the way for a return to economic growth. You cannot pump that amount of money into the economy via what is called quantitative easing without an impact. Equally you cannot keep interest rates at 0.5% for 7 years without helping business - at, of course, the expense of those living off savings.
The great myth of our time is that the economy is returning to growth because of prudent cuts. When you impose austerity at a time of an economic downturn the results are well known. Falling incomes produce falling sales, which means lower revenues for companies, resulting in people getting sacked, incomes falling and governments discovering that they need another round of austerity. The policy was tried once before in the 1930s. The result was the Great Depression, the rise of Hitler and the Second World War.
Fortunately the Bank of England and the IMF have refused to go down that route and have injected liquidity into the market for 7 years. Unfortunately what has been done with that money has been wasteful in the extreme.
I suspect that if you conducted a straw poll of the electorate and asked them what they would do with £375 billion then very few of them would say "You know what, I think we should make it available to those nice bankers who got us into our problems in the first place. We really need them to have bigger bonuses so that their income can trickle down to me".
With inflation at 0.3% and falling there is a need to pump yet more money into the economy to head off damaging deflation. The pound stands at record levels of 1.37 against the euro. We drastically need to pump money into the economy to bring this down so industry can compete. In these rare one off circumstances the Bank of England could very easily generate another round of quantitative easing without creating damaging inflation. The critical question is: "What will the government allow it do with the cash?"
If we really want to rebalance the economy so that it is well placed to compete in a world economy then I would argue that we should not be handing any more easy money to the banks. We could choose to use some of the next £375 billion to pay off a large chunk of the national debt. Or much better we could invest in updating our industry and our homes so that they function with much less consumption of energy and raw materials and thus ensure that they have a long term sustainable future.
That is what I would choose. I will leave others to speculate on their own list of priorities!