Options include abandoning cuts altogether, easing up on austerity, carrying on regardless, and cutting even faster
Abandon the cuts and go for growth
That was the suggestion from the left-of-centre thinktank Compass, which called for a new round of "green" quantitative easing to fund a programme of home insulation, the cancellation of PFI debts, raising benefits for the poorest, a financial transaction tax, and a crackdown on tax avoidance.
Ease up on the pace of austerity
This is the approach favoured by Ed Balls and the Labour party. He believes deficit reduction is necessary but thinks the economy has to recover first and is proposing a temporary cut in national insurance contributions, a £2bn bank tax to fund house-building and jobs for young people, bringing forward investment projects and cuts in VAT.
A balanced-budget stimulus
This sounds like a contradiction in terms but was proposed last week by the International Monetary Fund and is supported in the UK by the Social Market Foundation. It involves cutting areas of spending that generate little growth and using the money saved to fund infrastructure projects with higher growth potential. The idea is to get more growth while not increasing the budget deficit.
Leave policy unchanged
Osborne's strategy has two strands. Although slow growth means the budgetary position is worse than he planned, last month's budget did not tighten policy further. Instead, he allowed what are known as the "automatic stabilisers" (the tendency of the deficit to go up in recessions) to operate. He expects the main expansionary thrust to come from the Bank of England, through low interest rates and quantitative easing.
Cut further and faster
Free-market thinktanks such as the Adam Smith Institute and the Institute for Economic Affairs say Osborne's problem is that he has not been aggressive enough in cutting spending. A much smaller state would provide the scope for cuts in personal and business taxes, thereby boosting growth. Some Tory MPs agree with this approach.