Does Bean Count?

One of the more disingenuous tricks in Margaret Thatcher's rhetorical handbag was her use of the language of household economics to illustrate points about Britain's domestic economy. When a nation is in debt, she said, it should let its children go hungry rather than spend more money, because that is what a responsible parent must do now that the Victorian poor laws have been emasculated by generations of interfering crypto-communists. Or is that an uncharitable summary? Anyway, some posturing nonentity whose name escapes me at the moment revived this idea quite recently: Britain's present situation, it said, is "the same as a family with earnings of £26,000 a year who are spending £32,000 a year. Even though they’re already £40,000 in debt". And that's why Philip Green wants your pension. It is one of the very few issues on which right-wing British governments (viz. British governments) are immune to the American influence: the Roosevelt administration spent its way out of economic trouble during the 1930s, while navigating that unaccountable gap in American history which stretches from the great nation's useful intervention in the British victory of 1918 until 1940, when the United States fought shoulder to shoulder with its junior partner in the Battle of England.

Now, however, the deputy governor of the Bank of England says that in the present situation, with household debt at famously unmanageable levels, "we want to see households not saving more but spending more". Banks and businesses have such faith in the Chopper Coalition's economic policy that neither is willing to risk the possibility of the next bail-out coming with inconvenient conditions about boardroom bonuses; therefore let the little man step forth and do his part. The deputy governor of the Bank of England thinks households ought to forget about living just off their income: "it may make sense for them to eat into their capital a bit", especially with jobs being so secure and benefits so generous these days. Or is that an uncharitable summary?