Prime Minister Gordon Brown had us all fooled. According to him, he banished boom and bust and was the architect of the most prosperous years we have seen.
Brown convinced us and the banks that interest rates would be low and employment levels high, which encouraged banks to take increasing risks for lower margins and Joe Public to borrow more, safe in the knowledge that the debt was affordable.
We now know that we were suckered and the architect was just riding a global bubble like the rest of us.
Irrational exuberance, a phrase coined by former US Federal Reserve chairman Alan Greenspan, pretty much sums up why we are in this mess.
The phrase describes the tendency of financial market operators to downplay risk, to ignore warnings of the impending implosion of asset price bubbles and to leverage available capital to the highest permitted limits to maximise profits. What now?
We have mortgaged our future and anyone over the minimum earnings level will be paying for it for a generation. Higher rate taxpayers, who will soon be paying 50% Income Tax, can see a glimpse of the future under Labour.
Let’s hope May 2010 brings a new broom to sweep away the wrongdoings of the current regime.