The technocrats are coming

There was a time when the British could look upon the French, and their monstrously big government, with a sense of superiority: not any more. There is now a horrible similarity to our political predicaments. We both have political leaders who have failed to kick-start an economic recovery, in spite of repeated promises. We both have old-school socialists as opposition leaders, riding worryingly high in the polls while touting high-taxing policies that would not have sounded out of place in the 1970s. Meanwhile, national debt is rising on both sides of the Channel, albeit twice as fast in Britain as in France.

But Britain does have the pound sterling. A country with its own currency can print money and keep debt artificially cheap. Sir Mervyn King’s magic money machine, Quantitative Easing, has dulled the pain of the downturn — for borrowers, at least. Pain is transferred to savers, via low interest rates,  and consumers, via higher inflation.