Let's face it, we are in a mess. According to the BIS, the UK is the most heavily-indebted nation in the developed world, with total public and private debt amounting to something like 350% of GEP. Our economy is on the floor, unemployment is rising (particularly among young people) and would be even higher if it weren't for the fact that people are taking part-time jobs instead of the full-time ones they really want. Housing is still overvalued, first time buyers and young families can't afford to buy properties, and even if they could banks don't want to lend to them. Fuel costs are astronomical, food costs are rising, wages are flat. Businesses are going bust and individuals are going bankrupt.
Even worse is what's happening across the Channel. I, for one, am exceedingly glad that the UK did not join the Euro, which appears to be intent on blowing itself apart with an explosive mixture of market panic, economic mismanagement (by everyone, not just Greeks) and political inertia.
And then there's the US, with chronically high unemployment, welfare and healthcare systems that are very expensive and frankly unfit for purpose, a defunct housing market and debt that if stacked up could reach the moon - and a total lack of political will to deal effectively with any of this.
And then there's Japan....how long has that been bumping along the bottom now? Still paying the price for a housing bubble collapse and banking crisis two decades ago, not to mention recent natural disasters and an ongoing nuclear standoff.
And then there's China, which seems well-placed to become the overlord of the world - if it doesn't fall apart in a subprime crisis of its own first......
And then there's Switzerland, whose economy is being systematically crippled by scared investors moving their money to what they regard as a "safe haven". The SNB's attempt to deal with this by pegging the currency has effectively made tiny Switzerland the world's banker. Well, I suppose I can think of worse things for a country to be, but if and when they remove that peg, heaven help their economy....
I could go on, and on, and on....there are many, many more. The whole world is in an economic crisis.
On the face of it, the problems faced by all these countries look very different, don't they? But actually they all boil down to the same things. Political deadlocks, market panic, and above all - the dominance of economic theories that put the interests of international money ahead of the needs of ordinary people and ignore the real issues facing the world today.
Any economic theory that does not have the interests of PEOPLE at its heart is morally bankrupt. And by PEOPLE I don't mean the moneyed elite that play the international casinos. I mean ordinary people living ordinary lives, doing ordinary jobs for ordinary wages - bank clerks (yes, really), shop assistants, garage mechanics. I mean owners of very small businesses like mine, sole traders and little companies - corner shops, plumbers, peripatetic music teachers. I mean elderly people trying to live on a pension that diminishes day by day as inflation outstrips interest on savings. I mean single mothers trying to be both loving carer and adequate provider to their children as their benefits are cut and they are charged for trying to obtain maintenance from their runaway spouses. I mean young people leaving college in debt with little prospect of any decent job in the forseeable future.
I'm sure most readers of my blog would agree with me that we need an economic theory that really addresses the needs of these, and many other, people. The trouble is we don't agree on what that theory should contain. On one side we have those who believe that the way to prosperity is ramping up public debt (since interest rates are very low) to invest in public works, expanding the public sector hugely in order to develop essential infrastructure. On the other side we have those who believe that the way to prosperity is to cut the public sector brutally to allow the private sector into the gap that is left, because the private sector is a better source of innovation. I wish that both sides could see that they want the same thing, but they don't agree on how to get there - and they waste a lot of time and energy insulting each other rather than trying to achieve a compromise that honours the respective roles of both private and public sector.
For me, though - and I know I've said this before - if there are endless debates that degenerate into slanging matches and solve nothing, both sides are missing something important. Here's what I think the missing issue is: both sides anticipate a return to growth some time soon. But I think they are wrong.
We have lived for a century or more in the belief that prosperity comes through economic growth. And indeed, economic growth in the developed world has been astronomical in the last hundred years. We see the benefits in our comfortable lifestyles - and now, understandably, countries whose development has lagged behind want a piece of the action too. To support the lifestyle that we come to enjoy and enable other countries to have that too, the world economy has to grow - and maintain growth - at an unprecedented rate.
But the growth rates of the last century have been achieved through use of a finite resource. I mean oil, of course. And there is no doubt that we have nearly exhausted the known reserves of oil, but our global demand for oil is higher than ever before.
Now don't get me wrong. I am not playing the environmentalists' "economic catastrophe" card. I don't think the world running low on oil will mean all the lights will go out and we will return to living in caves. I am constantly amazed by the ingenuity of humans, and I have no doubt that solutions will be found to substitute for the crucial role that oil has hitherto played in the global economy. But it won't be quick, and it won't be cheap. And above all, it won't enable ANYONE for the foreseeable future to have the sort of economic growth that we have come to rely on.
So any economic plan that aims to restore the sort of economic growth we have had in the past is fundamentally flawed. And any political manifesto that claims that growth will sort out our financial and economic problems and restore the "good times" is dishonest. So I oppose "Keynsian" stimulus packages, whoever proposes them and whatever name they go under, if they involve more public borrowing. We cannot expect to have the sort of growth that will reduce that debt in the future, and although interest rates are very low at the present, there is no reason to suppose they will still be at that level in five years time. Yes, sovereign countries could print money instead of borrowing. But the relationship of money printing to inflation is well known, and although I suppose it is theoretically possible to manage the production of money so tightly that the inflation risk is minimal, I have no confidence in the ability of politicians to resist the temptation to interfere with this discipline in the interests of buying votes.
On the other hand, there is no doubt that people are suffering from our economic decline, and I don't see any prospect of this improving in the short term. I believe it is the job of government to support those who are the undeserving casualties of economic difficulties. Yet almost all the countries I have mentioned above are currently implementing spending cuts which hurt the most vulnerable in society. To me this is uncivilised. I don't want to live in a society that can't or won't help those who are unable to provide for themselves. And therefore, I don't support cuts in the public spending programmes that support the weakest. We are not so poor that we can't afford to care. Now, it is possible that providing people with the support they need to survive the next few years might require an increase in public spending in some areas, and that might involve additional borrowing. But I personally would regard that as money well spent.
What I DON'T want to see government doing is spending money - whether obtained through taxation, borrowing or printing - to prop up failed companies, build white elephants, host expensive flagship events, develop vast IT systems that are cancelled before they are implemented, or provide finance to high-risk small businesses that no commercial bank would lend money to (as Samuel Brittan suggested in the FT the other day). Or to set up a very expensive, monolithic and clunky state banking system, when all that is needed to provide essential banking services in the event of major clearing bank failure is a basic electronic payments facility and emergency lines of credit. And personally I don't even want government involvement in the development of green technology and replacements for oil - although I accept there is a role for government in financing R&D and very large infrastructure projects - because I think the private sector does that kind of innovative work much better. I'd rather government focused on providing essential services to support people. Because for me, that's what the public sector does best.
If I am right about the future facing us, then there are implications for our lifestyles. Will commuting become a thing of the past, replaced with homeworking, networking and electronic conferencing? Will schools and universities become centres of virtual learning, with students based at home (with homeworking parents?) and participating in on-line lessons delivered in real time? Will we see a return to shops within walking distance of people's homes and vibrant local high streets, replacing large out-of-town shopping centres only accessible by car?
Perhaps, when we can no longer rely on oil as we have done, it will force us to think more locally, to engage with our local communities and build prosperity through real economic activity from the grass roots up. And surely that is the best way of achieving a positive, prosperous future.