Reading Paul's call for increased spending on childcare might suggest that he's conflating two separate issues. He says:

So how will the extra money be found? I'm a sensible post-Keynesian who enjoys the benefit of Modern Monetary Theory insight, and so I understand better than IPPR appear to that the best way to invest is through deficit spending. That would, well, just work.

Now, there is a case for deficit spending. And there is a case for increased spending on good childcare. But they are two different things.

The case for spending on childcare is that, as James Heckman has shown (pdf), it is a great investment. Better childcare leads to more educational achievement and better health and thus higher economic activity and lower public spending in the future. Even if the Austerians and "in the black Labour" group were wholly correct and we do have to curb public spending overall, there'd still be a case for higher spending on childcare. And if there isn't, you should be arguing against Heckman, not Keynes.

So, is Paul just mistaken to conjoin the two logically separate issues? Maybe not. The problem here is one of public choice.

Ed Balls has claimed that a Labour government's "zero-based spending review" will "[assess] every pound of taxpayer's money including for its impact on growth and fairness."

Given its high social return, childcare spending should emerge from such an assessment not only intact but with a higher budget.

If, that is, the assessment were based only upon disinterested and far-sighted rational thinking.

But it might not be. As Roger says, zero-based budgeting usually becomes a way for consultants and managers to press their own interests. There's a danger that, by the time a government has pandered to powerful bureaucrats, corporate lobbyists, the Daily Mail and unions, zero-budgeting will end up cutting the sort of pre-school childcare that has good returns because it doesn't have powerful interests to speak up for it. Who's got the most power over politicians: unions, big business, military chiefs, the media - or nursery teachers?

From this perspective, I fear that Paul might be right to link deficit spending with childcare - because, given political pressures, only deficit spending can protect sensible long-term investments.

Mr Balls might want to make intelligent cuts in public spending. But what if his desire exceeds his ability? There then emerges a trade-off between smaller government and efficient public spending.