Just off the top of my head here, some reasons why the coalition's policies wont save the economy:
Firing potentially hundreds of thousands of public sector employees and reducing unemployment benefits - the most obvious negative effect will be the loss of hundreds of thousands of customers for businesses of various kinds across the country. The reduction in welfare will of course also reduce their spending power as members of the unemployed. The labour market will be swamped, jobs will be hard to find for graduates competing against experienced public sector workers, which will likely increase youth unemployment. Not to mention the potential long term damage caused by inferior public services.
VAT/petrol/transport price increases - the VAT increase, regardless of how small, is liable to discourage spending for at least the first few months of the year, which will damage businesses still precariously balanced post-recession. The increase in petrol, while not directly the governments fault, could be limited by either a tax reduction or a price cap. Not only will the increasing fuel prices decrease customer spending as their disposable income is reduced, but the willingness of customers to travel to distant shopping centres will lower. Businesses which are now receiving smaller numbers of customers, who spend less, have to pay more for the delivery of their stock, all of which means they will have to reduce either wages or staff numbers - all of which will reduce spending (cycle alert). Increase in train fares will have the same effect upon consumer purchase as fuel, and will negatively effect the environment as more people choose to drive.
General cuts to public sector - Leaving aside the unemployment implications, the coalition will likely find out that many of those bodies they dispensed with will need replacing, and if they choose to use private companies for this instead of government services, will probably (due to overheads and a desire to make profit) find it costs them more than the government department did in the first place.
Cuts to Education (+ Uni fees rise) - Decreasing the quality of education in the country will lead to a decrease in the capacity of the nation's employees, both to perform their tasks and compete in a global market. Which will weaken British companies and in turn reduce the power of the economy overall. Plus the graduates will all be saddled with extra debt to obtain degrees that are inferior to those of previous generations. An increase in private schools will lead to yet more expenses for parents and will once again reduce disposable income.
As far as I can tell, the coalition appears to be unaware that (amongst so many other things) our economy is predominantly a consumer one - ie reliant upon disposable income. As such, high wages and employment are absolutely crucial, as is the ability to transport goods cheaply across the country, as are the abilities of graduates to perform their jobs effectively and spend the majority of their earnings on consumer goods. The lack of public sector services will increase living costs and weaken the country's infrastructure. Unfortunately our politicians either don't seem to know, or care. Another wonderful victory for democracy in Britain. I'd like to feel sorry for whichever government will have to pick up the wreckage left behind by this one, but unfortunately I wont because no doubt their intentions will be just as narrow minded and ill informed. It does make you wonder, exactly what do they teach at Eton? Besides sodomy and an ability to lie straight to somebody, anybody's face.
Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866
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