In the early days of the Second World War (September 1939 here in Europe) there were months of no significant action. This period was known as the phoney war. We had declared war but nothing was really happening.
Today we are not fighting each other, but we are fighting the excessive budget deficits. The annual UK deficit is thought to be £180bn ($290bn). Over the next five years the plan is to reduce this by £80bn ($125bn). This is said to resolve the problem.
Now this maybe simple maths but even if this reduction happened today, and the deficit became £100bn per year, we will be another £500bn in debt. This compares with the £800bn that we are already in debt.
The politicians are saying that this growth will come from the private sector, i.e. business growth. They are hoping that the private sector will create employment for the 500,000 civil service workers that will have lost their jobs in this process.
So with low demand at home we must believe that we will export our way out of trouble. I think I have heard every other country saying this.
At the same time we are not putting up interest rates even though inflation is running at a steady 3%, depending on which measure is the politically convenient to quote. So are the public spending cuts nothing more that social engineering based on political dogma and the real value of the national debt will be allowed to wither on the vine of inflation? Making this a phoney war on the public deficit?
Or is it the case that, like in the early days of the labour administration, the new government has no idea what they are doing and are lost in the euphoria of victory.