Edmund Conway makes a shrewd observation in the Telegraph. It is not just that "for the first time since the start of the financial crisis, investors demanded a bigger premium in return for holding British debt than Spanish," bad news though this is. Nor is it that "the Bank of England has embarked on a quantitative easing scheme that involves printing enough money to buy the annual economic output of Denmark." It is that our time-honoured formula for dealing with runaway debt and runaway spending - by runaway inflation - will probably never work again. Could we try it again, damaging and humiliating though it would be?
Look at the figures. About a quarter of our debt is index-linked bonds, which rise automatically with inflation. And many of our liabilities, including public sector pensions, state pension and PFI, are now also tied to inflation. It means that the option of cheating our creditors by repaying them in devalued pounds is no longer a valid one. Four-fifths of our debt, says Conway, is inflation-proof.
What, then, can we do? You stop the spending spree, cut back the public sector, stop financing a pre-election spending spree on debt, and start a programme of retrenchment and repayment. Coupled with that must be tax reductions to boost incentive and growth, to generate the wealth that can repay that debt. It will be done, but not by this government. Maybe, just maybe, it might be done by the next one.
Madsen Pirie's "101 Great Philosophers" can still be ordered in time for Christmas presents.