Fraser Nelson

The more you study the Recession Budget, the more it hits you: this horror story is a best-case scenario. It's based on almost comically optimistic assumptions. We are apparently halfway through a recession that finishes next May. Then growth starts again, they'll magic up £5bn of efficiency savings and the rich will somehow break the habit of a lifetime and not find accountants to get them out of paying extra tax. Darling may as well have finished his speech saying "and we'll sprout wings and fly to neverland" because that's the gist of his forecasts. It is strikingly unoriginal. Brown has done what he has always done: borrow, based on fake forecasts that he'll have to tear up at the next Budget blaming yet another unforeseen economic event.

So this was the Recession Budget surprise: a seven-year horizon with no debt repayment plan. Ha! Bet you didn't expect that. Britain is to be transformed from a low-debt country into a nation saddled with a wartime debt without having fought a war. And as for today's Brownie - it's one the Stern Review used: fake juxtaposition. Brown presents the splurge (or splutter: £9.2bn this year, £16.3bn next) on one hand. And on the other, tax rises for the rich. He wants newspapers to write that one somehow cancels out the other. But it doesn't: he has no plans to fund his extra spending. He'll just keep borrowing. Debt will keep rising from £537bn in 2007-08 rising to £1,020 in 2012-13. Darling says it will peak then, but only as a share of GDP.

The latest rumour is that Brown will pay for his VAT cut with a delayed 45% rate of tax for those on £175,000 and over. So off the radar has this move been that (unlike a VAT cut) it's not even in HM Treasury's ready reckoner. Enough is now know about tax economics at these salary levels to establish that raising the top rate results is a false god - the super-rich don’t hang around to be taxed. That's why top tax levels have been falling worldwide to compete for the high earners. France has cut its top rate from 48% in 2003 to 40% now. So "tax the rich" is a useful political slogan, but is economically futile - as governments around the world know.

After months of dodging the question, Gordon Brown has finally admitted he was wrong to repeatedly claim that he’s abolished boom and bust. Jeremy Vine has just asked him on Radio Two if that was a mistake and he replied: “Yes. Of course politicians make mistakes and I've got to be honest that we've made mistakes.” This goes far beyond a soundbite, and in fact lies at the heart of the economic bomb that has just exploded. Brown, like Greenspan, thought we’d entered a new era of permanently low interest rates – and that just because inflation had been tamed, it meant we’d hit some kind of economic equilibrium. This is the dangerous folly which made policymakers blind to the massive asset bubble.

George Osborne needs your help, or at least we think he does. He will be spending this weekend hunting for lines for his all-important speech on Monday answering the Pre-Budget Report. Left to his own devices, he may be tempted to go all “responsible” saying “what’s important is that we get credit markets moving” or some other line that will mean nothing to the people watching at home. You the CoffeeHousers, though, can steer him in the right direction by helping write our wiki-rebuttal. It has to be stuff that Osborne can seriously use. Maximum 150 words and a bottle of Pol Roger for the best entry. The stakes are high.

Most debates about what the Tories should do are split between what’s right, and what would go down well to win elections. I believe that strong parties start with the former, and work up a way of converting it to the latter. This is why I disagree with James. Refusing to match Labour on health spending in 2010/11 has indeed left the Tories open to the accusation – levelled against Michael Howard in 2005 – that they’ll shut schools and hospitals. James regards this as an unnecessary hostage to fortune. The Tories should no longer be afraid of this for three reasons. First, it’s a lie. Next, it is Labour that closes schools and hospitals, and Cameron should welcome a chance to remind the electorate of this.

One of Gordon Brown’s favourite tricks is claiming he’s pursuing a particular agenda at the behest of a person/organisation above party politics. Hence those endless reviews: Stern on climate change, Wanless on health, Barker on housing – all with parameters set so tight that they were programmed to come out with what Brown thought. I’ll wager that in the Pre-Budget Report next Monday, we’ll hear the same – that this huge deficit (prob £60bn this year and £85bn for 09/10) will somehow be at the behest of the IMF and the world. So if the Tories oppose it, well, they are isolated because the whole wide world wants a fiscal stimulus. Except the world doesn’t.

Gordon Brown says he “regrets” George Osborne’s “partisan talk” warning that we may have a sterling crisis on our hands – his implication being that the Opposition should be supporting him, the Father of the Nation.  In fact, there has never been a greater need for full-blooded, disrespectful, combative, full-on scrutiny of what he says.   I suspect the main reason Brown “regrets” what Osborne said is because Osborne is right. I haveblogged before on what should be known as the 2008 devaluation of sterling.  It gives the lie to Brown’s theory that Britain has a strong economy well-placed to fend off this “contagion” from America.