Two requirements for a dynamic economy

I will not claim these two truisms , but can't remember where they came from, so I am merely recycling. It could be said that there are two requirements for an economy to work efficiently - and these go back to the Roman Empire and perhaps beyond. The first is an efficient and effective method of collecting and using taxes. This invloves reducing to a minimum inefficent collecting, evasion, avoidance and corruption. It also means that ALL taxes collected should be used for the public good, as identified by government. The second is the effective conversion of savings into investment. This, of course, involves the banks, equity and bond markets and other financial institutions. In the UK we are certainly making progress in the first requirement. It is the second that remains a huge problem. The recent poor lening figures from the banks illustrates the depth of this shortcoming. Governments need to make this a major priority and this emans they will have to face down the banks and call their bluff regarding competition and the threat to wihdrw their operations. They won't, so do it.