Given that consumer spending powers the bulk of British economic growth, the impact will be massive.
The FT looked into forecasts by the Office for Budget Responsibility, which projects spending in 2015 to be just 5.4% above the 2008 peak.
But a survey of 18 major recessions since 1830 showed that consumer spending on average recovered to 12% above previous peak within seven years.
At the equivalent stage after recessions in the early 1980s and 1990s, spending was 20 per cent and 15 per cent higher respectively. This will make the current economic recovery the slowest of any comparable post-recession period.
These are government projections.
Anyone with a shred of understanding of fractional reserve banking and money supply knows why.
Our esteemed chancellor is an ideologue who is doomed to follow the IMF mantras of privatisation and austerity budgets. Austerity will simply lower confidence and shrink the money supply.
And guess what - only 1 in 10 people have any confidence in the economy and the economy is at best stagnant.
The great fear is that a vicious spiral will engulf the UK economy. Rising oil prices will cause inflation - that will trigger a rise in interest rates and a house price collapse. That will surely lead to another UK banking crisis as household after household defaults on their mortgages.
One has to question whether "Bail Out II - who can we blame this time" will be swallowed quite as dumbly by the public as the last one.
Is the stage slowly being set for a scenario when monetary reform emerges into the mainstream?
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