Today it was revealed the PSBR for the last six months was a massive £37.5 billion, the highest ever. The full year figure for 2008-9 is likely to be between £80bn and £90bn. Even though public spending is already out of control, the Chancellor's plan to avoid recession is to spend, spend and spend again, increasing public borrowing still further. Government ministers cling to the mantra that government debt is only 37 of GDP when it is in fact 43 per cent (so says the ONS) and once you add in all the new liabilities it must now be far higher than that.
Alistair Darling clings to the hope that old fashioned pump prime Keynesian economics will increase consumption and therefore boost economic activity. And he may be right. Sadly though, it will increase economic activity in all the countries we import consumer goods from rather than our own.
Of course, if he were a true Keynesian, Darling would also be putting up taxes. I don't need to spell out both the economic and political pitfalls of doing so. If he does, he will copy his predecessor and do it very stealthily.
The best way to generate meaningful and long lasting economic activity and jobs is surely to cut interest rates further.
The other thing the government could do is stop spending taxpayers' money in the wrong areas and spend it more efficiently. Even with only a 5 per cent efficiency saving, £30 billion would be freed up to either cut taxes on the low paid or to spend in other areas.
When I was doing economics A Level in the late 1970s I constantly asked why 90 per cent of the syllabus was based on discredited Keynesian economic theories with monetarism only getting a passing mention. I don't know what is on the A Level economics syllabus nowadays, but I bet J M Keynes is getting a bit of a revival.