In a two part series, The Party’s Over: How the West Went Bust, Peston explains how hubris, greed and ignorance for decades means years of pain ahead.
Years of excessive borrowing to feed consumption rather than investment have left Western nations with a debt mountain and little to show for it except goods and property.
Peston meets a British graduate with a first class psychology degree working in a grocers. He speaks to experts warning of declining living standards sharper than at any time since the 1970s.
Economist Will Hutton warns British families will have to take fewer holidays and buy cheaper clothes for the next decade.
The chickens are truly coming home to roost as the economic fantasy and indulgence of the past 30 years comes crashing down.
The medicine for debt is austerity but the UK government’s deficit reduction programme is the tip of the iceberg.
The real target is government, business and individual debt, which is such a huge drag on economic output.
But, as with many medicines there are side effects, as Peston observes in Greece where the economy is tanking because of austerity.
Years of mass unemployment, rapidly declining living standards and recession is the economic fate of Greece. It has seen non-political unelected technocrats implement austerity programmes. Greece offers a terrifying microcosm of the debt problems across Europe and the West, especially Britain.
To make matters worse the disastrous debt of the West is juxtaposed with the thrift and sensibility of the East.
Peston explains the progress of the Chinese economy and the effect of the East Asia crisis of 1997-98. A debt bubble burst and they vowed it would never happen again, so built safer economies.
That a cultural attitude to thrift is lost in the West is seen when Peston conducts a street study in the UK and China about savings which shows Chinese people save on average 50% of their income while Britons save an average of nothing.
The Chinese government has a huge budget surplus compared to the debts and deficits of Europe and the United States.
And the Chinese prioritise exports over imports while Britain imports considerably more than it exports with a focus on services, particularly finance and legal, rather than manufacturing.
This is what economists call global trade imbalances and causes concern as China relies on the consumption of the West to feed its export economy.
The way out of these imbalances is for the West to replicate Germany, which exports far more than it imports and retains a culture of thrift.
This form of economic change takes a long time but the government has made noises that it wishes to move in this direction.
The biggest problem facing Western economies is the deleveraging of debt – individual, business and government – without crippling growth.
Peston’s show is a brilliant analysis of the debt catastrophe and its long-term effects that is littered with insightful examples from across the globe.
The state of Britain’s debt and economy is much closer to Greece than Germany and that should make us all afraid.