The tragedy for Britain is that just when we'd like to be able to draw on reserves and savings to boost activity after a downturn in the cycle, we find there's nothing there. This makes the choice we face about how to alleviate current pain far more difficult than it should be. Some say we must have a Keynesian fiscal stimulus - others say that by piling debt on top of debt it would make things much worse.
Gordon Brown, the architect of our debt mountain, wants to reduce taxation by increasing borrowing. It is far from clear that such a general spending splurge would in any way have the desired affect. At the very least, it would lead to tax increases later; at worst, it could lead to a systemic deterioration in the whole country's economic condition.
In short, it could prompt a collision between fiscal policy and monetary policy. Low interest rates remain the most immediate and the most potent instrument for assisting cash-flow and helping people service their debt. But if the country's fiscal deficit suddenly grows at a time when the overall economy is contracting, there is a serious danger that long-term interest rates would have to rise both in order to sell the gilts it needs to finance its deficit and also to stop the pound from going into freefall.
And so it might turn out that greater borrowing, instead of stimulating the economy, could in fact sink it. But there is a further danger. The Government, and others, insist that these supposedly stimulating tax cuts should be temporary. We would therefore face the prospect of taxes going up again, and by more than would otherwise be the case, just as Britain is emerging from recession.
What David Cameron proposed on Tuesday better understands the modern world and is better attuned both to the challenge of recession and the opportunities for recovery. We do not want to see unfunded tax cuts and a massive increase in borrowing now; nor do we want to jeopardise the low interest rates that people need. Consistent with that view, we have announced that our public spending plans from 2010/11 will diverge from Labour's published figures and take a lower path.
In the world after Keynes, cash and capital moves around far more quickly. Greater borrowing is not an instrument whose effects can be applied within the boundaries of a self-contained economy. Gordon Brown's plans put our recovery at risk because just when we would be coming out of recession, his earlier fiscal laxity would be hurting our international competitiveness.
In the same way as we are ill-equipped to cope with this stage of the economic cycle now, Gordon Brown seems determined to set us up to be even more ill-equipped for coping with the recovery. Fiscal indulgence now would become a drag-anchor on recovery later .
A temporary tax cut is meaningless to the investor who wants a stable picture for the long term and if excessive borrowing has created systemic deterioration all it will do is make the recession longer and deeper. Temporary measures funded by borrowing and lasting tax increases will prove detrimental in the long term.
Gordon Brown has become a manager of decline. David Cameron is the architect of long-term prosperity. That is now the difference between the two parties in Britain.
This is the message which every member of the Shadow Cabinet needs to put out to the country. Relentlessly, and in language which everyone can relate to. There's no doubt that the mantras which Labour Ministers are uttering - downturn started in America - help families and businesses through the downturn - etc are having an effect. They may appear to be meaningless drivel (and they are) but I suspect to the man in the street they sound believable, at least in the short term. The Tory approach is geared to the long term, but we have to bear in mind that in the short term Brown might just possibly dash for an election. I still think it is unlikely but no one can rule it out.