According to the Mayan calendar, the world will end on the 21st of December, but reading the commentary on the Chancellor's autumn financial statement last week, you could be forgiven for thinking that apocalypse had come early this year. George Osborne's admission that his austerity policies will last at least until 2018 has led to much anguish and soul-searching as the Great Recession, as it has been called, slides into a Great Depression.
It's bad. No point denying it. Britain's slump has already lasted longer than in the 1930s,though the impact has been disguised by falling unemployment figures. However, this is largely because millions of people are now working part time in dead end jobs with no security and no future. The problem of public and private debt remains as serious as ever. British households owe more than annual GDP and government borrowing has actually been increasing – though this was disguised by Treasury jiggery pokery in the autumn statement, adding one-offs like the sale of 4G mobile phone licences. The Bank of England has been printing money like there's no tomorrow and British exports have been falling despite the low pound.
All we hear is doom and gloom, as Sir Mick Jagger puts it (though at £400 a ticket he's never had it so good). Some are saying that this is a structural change in post-industrial economies and that we can no longer rely on growth naturally returning after recessions; that we are turning Japanese and face a lost decade or two. But we should beware economic defeatism, however seductive. Doing nothing is not an option, and the government's refusal to act is not entirely because it has run out of things to do. There are other agendas at work here – like cutting welfare and the public sector. The Tories don't want to let a good crisis go to waste.
