Britain's shrinking economy is a paper house: "why the level of debate is farcical" - by Aditya Chakrabortty

When the news came in last Friday that the British economy was shrinking yet again, I slogged through the GDP report, the City analyses and the this-is- going-to-hurt-you-more-than-it-ever-hurts-us justifications by cabinet ministers. Yet none of them seemed to me as acute a guide to our present mess as an old comedy sketch by Armando Iannucci.

It begins with an estate agent taking a young couple around a house.

The dialogue is perfect: the broker waxes inanely on ("A lovely space"), and the prospective buyers ooze gratitude at being granted a viewing. But after tapping mannishly at the fixtures, the husband detects a problem. A big one: "This thing's made of paper."

Rip! His fist goes through the parchment microwave. The drawers and cupboards are torn apart. And when the water's turned on, the soggy paper taps wilt.

And just as Iannucci's couple eventually discovered that their house was made of paper, so in 2007 Britain's economic boom was revealed to be little more than a finance bubble.

The reason for this barrage of facts and stats is simple: you don't often get them elsewhere. Since the banking collapse, what purports to be a serious debate over the future of the economy has been whittled down to little more than a ping-pong match: cuts v no cuts. On the one side, you have David Cameron and George Osborne with their "tough choices" and stupid austerity.

But on the other, you have the equally false position staked out by Ed Balls: that with a wave of a Keynesian wand we can be magicked back to 2006.

Well, here's the thing about 2006: the economy was in better shape than today, but it still wasn't working for the majority of Britons. And unless we're honest about just how crocked our economy is, how the private sector doesn't create jobs and hasn't done serious investment for decades, we won't get out of this mess. We'll just be trying to rebuild a paper house.

Note EU-Digest: If that is not enough, quitting the EU will drag the British economy even further down.

Read more: Britain's shrinking economy: why the level of debate is farcical | Aditya Chakrabortty | Comment is free | The Guardian