Posted at ConservativeHome

1. We are in this mess because as a society of consumers, we have lived beyond our means. Governments and households have borrowed far more than is healthy. Note how both the US and Europe owe China and the East, many $ billions in treasury bills and IOUs.

2. Restoring health will be difficult. It’s going to mean that asset prices (think houses) will come down. Yet politicians still talk of action to restore the housing market.

3. We need to ensure that the interests of savers are balanced with those of consumers. The default assumption that very low interest rates is always and everywhere good needs rethinking. Yet politicians seem to have little idea of how to encourage healthier savings ratios.

4. Above all, we need to recognise that government is going to have to cost less. That means not just cutting waste, but challenging the post-War consensus that government must run things for us from the centre.

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