There is a lot of scratchy talk at the moment about spending our way out of recession. Simon Jenkins was at it in the Guardian yesterday. It seems Keynes never went away during the past 30 years of monetarism and “tight” fiscal rules.

His easy way out of the soup: spend, spend, spend, has always been grasped at eagerly by Labour governments to expand their beloved state sector with yet more bureaucrats. They are the economy, said Yvette Cooper during the long years of Gordon Brown’s dominance of the fiscal scene.

Conservatives usually want to cut the “public realm” and transfer the workers into private sector jobs — productive sector would be a better term. The idea is to stop them being a burden on taxpayers and transform them into contributors to the national wealth.

Britain ran the largest empire the world has ever known with 10,000 civil servants. It now employs many millions to perform a similar role in the UK alone.

The current “austerity” is not a mean-spirited reversal of everything Labour did in office, but a macroeconomic transformation of the balance between the payers and the paid. A healthy economy needs nothing less.

In a prudent way, the public spending route can be a useful tweak in times of manageable budget deficits and lowish national debt. That situation no longer applies. Brown ran hefty deficits during the times of plenty, putting nothing away for the recession he denied was coming.

Britain is at the limits of its debt dynamics now, holding off calamity by its good ratings in the bond markets. Another spending spree would unleash a truly momentous perfect storm. Look around Europe and smell the fear.

So we have to stick with the medicine. There is no other option.

Gordon ate all the pies.

John Evans

Watching Gordon Brown’s fantasy Budgets often felt like consuming a large dish of soused herrings — sour, vinegary, and more chewy protein than was palatable.

By comparison, George Osborne’s first effort was chocolate cake topped with whipped cream and strawberries. Given the differences between them, you might think it should be the other way around.

No! Osborne satisfied our despairing appetite for realism, honesty and a massive aspiration for a healthy, self-funding economy in the medium term. How we enjoyed every cut-throat word of it.

Despite his detractors in the City and the media, Osborne’s reputation is made. This Budget will be remembered even more than Geoffrey Howe’s pitch perfect 1981 effort — in which he defied 364 top economists to return the country to growth within a year — simply because, in scale and in enterprise, it tops it by a mile.

The structural deficit will be eliminated by 2014, producing a surplus that will begin the long haul of lowering the UK’s massive stock of public debt. Under Osborne’s strict rule, it will top off at 70% of GDP, not the expected 100% from Labour’s deficit halving plans.

This is serious stuff. It will need reductions in departmental spending of up to 25% across the public sector — apart from Health and International Development. The latter, of course, are political choices not economic ones. Any half competent economist can spot the waste littering these inefficient agencies of the State. I am sure they are marked down for major surgery in the Conservatives’ second Parliament — minus the Lib Dems, perhaps.

One thing I enjoy about this hybrid administration is the zeal with which it scraps anything that has Gordon Brown’s stamp on it. Out goes the FSA, the laughable “Golden Rules”, hugely complex benefit mountains, and, as we’ll hear in the autumn spending review, much of Brown’s cretinous agenda for public sector dominance of personal behaviour.

Brown must wonder why he bothered to build such a vast top-down infrastructure of command and control, especially as all that treasure spent didn’t win him his coverted General Election victory. The Tories are clearly intent on total ruthlessness where corrupt Scottish Labour politics are concerned.

The question we have to ask is why our democratic processes didn’t protect the nation against the mafia-like tactics of Gordon Brown, Mandelson and the rest of New Labour’s despicable crew.

Osborne’s Budget gives us hope that we will never see their like again.

Speculation is rife that the social democrat contingent in the Lib Dems, led by Charlie Kennedy, could split away from the Coalition. I don’t see that happening for a year or two, at least until Labour starts getting decent polling results under a new leader. Harriet Harman is planting the seeds of that move furiously. It could happen within this Parliament.

Nick Clegg and the genuine Liberals may even unite with the Tories to form a real Liberal Conservative Party. His loyalty so far suggests that this could be a return to the old Conservative dominance of British politics for decades to come.

John Evans

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When the eurozone goes, it will go suddenly. One moment it will be there, and then it will have vanished into the historical annals of catastrophic human vanity projects that disappeared.

Gordon Brown, who claimed to have “saved the world”, was partly instrumental in all this. He it was who transferred the massive private debts of the ailing banks onto the public balance sheet, thereby creating the current crisis: Sovereign Debt.

The world followed the sorcerer’s apprentice into universal contagion. Brown made his claim for glory, now he must bear the approbrium of putting the world’s financial systems at deadly risk.

Europe is the epicentre of the new Armageddon, and the euro currency is its central cause. Britain did well to stay out of it, but, as an EU member, we are still trailing in the wake of this approaching cataclysm, subject to bigoted laws and restrictions from Brussels.

To make matters worse, regulators are depressing the money supply right around the world by their insistence on higher capital ratios in the banking sector.

Moreover, Britain is being contaminated from the Continent in ways that are not being explained to the general population unless they read the FT or the business section of other newspapers, notably, the Telegraph. We are in the eye of a storm, and it’s relatively calm … for the moment.

If Greece, Spain, or Portugal collapse, banks across the European Union will be left holding almost worthless sovereign bonds. It will be the end of the road if trillions of sovereign debt is written off, or “restructured” in the jargon. Major banks and corporations will fail.

Such contagion would leave governments helpless to respond. Theoretically, the IMF would be bust. The US Senate has already made its position clear by 94 votes to 0 — no more American dollars.

Almost the minimum that can happen now is an awesome deflation across Europe and America — already the US money supply is shrinking at an alarming 10% on an annualized basis. A double-dip recession is at the benign end of the spectrum.

The worst case scenario is that a worldwide contagion begins on the European continent. August 1914 will have its 21st-century anniversary in four years. And the grandiose political vanity of Continental politicians will be at the heart of it.

This sunny spring could represent a kind of Edwardian glow before the chancellory lights go out once more across Europe.

David Cameron should use his new leverage to negotiate the UK out of the danger zone and back to full independence.

John Evans

ROLLING POST

[7.30pm GMT 11 May] David Cameron is the new Prime Minister of the United Kingdom. He is the Queen’s 12th Prime Minister of her Reign, the youngest since Lord Liverpool in 1812.

[7pm GMT 11 May] David Cameron is heading towards Buckingham Palace to kiss hands with the Queen on appointment as Britain’s new Prime Minister.

[6.43pm GMT 11 May] Gordon Brown has left the Palace and is no longer Prime Minister. Britain as of now has no PM. The Queen herself holds that power until, in 15 minutes, David Cameron is expected to arrive and relieve his Monarch of that burden.

[6.20pm GMT 11 May] Gordon Brown announced he has resigned both as Prime Minister and leader of the Labour Party. He is currently on the way to Buckingham Palace to tender his resignation to the Queen. David Cameron is expected to go to the Palace soon. Nick Clegg is expected to be Deputy Prime Minister in the new Government.

[5pm GMT 11 May] The Queen is in Buckingham Palace as a deal is very close between the Conservatives and Lib Dems. Her Private Secretary is reported to be in the Cabinet Office. Brown is expected to resign tonight to take up a career of writing and charity.

[4.17pm GMT 11 May] The BBC’s Nick Robinson is reporting that fixed, four-year Parliaments part of deal with Lib Dems.

[4pm GMT 11 May] Gordon Brown will resign his seat and leave politics altogether.

[3.45pm GMT 11 May] Sky reporting that staff assembling in 10 Downing Street to say goodbye to the Browns.

[3.35 GMT 11 May] Meeting of the Privy Council in Buckingham Palace in 25 minutes. Although a routine one, it could become involved with the fast-moving events.

[3.15 GMT 11 May] The Evening Standard is reporting that Gordon Brown is about to resign. He will go to the Palace this evening or tomorrow morning. The Queen will then send for David Cameron.

[3pm GMT 11 May] There are reports on the BBC that Gordon Brown’s baggage is being loaded into cars as I write. Now denied.

It also looks as if the Conservatives will form a pact with the Lib Dems later today — “The only deal in town” (Lib Dems).

Could David Cameron go to the Palace this evening? We await the Queen’s helicopter from Windsor imminently.

John Evans

I’ve just watched the most extraordinary row between Labour spin doctor, Alastair Campbell, and Sky News’s Political Editor, Adam Boulton.

At one point it looked as if they were about to come to blows. Boulton, in very aggressive terms, accused Campbell of “telling him what to think”, and he kept repeating that almost like a man possessed.

Campbell kept his cool but seemed surprised at the fury of Adam Boulton’s reaction. Sky’s veteran presenter, Jeremy Thompson, tried to cool the clash, but looked embarrassed at Boulton’s continued tirade.

In the end Sky cut to Gordon Brown’s resignation announcement.

I must say, I thought Adam Boulton’s aggression was rather unprofessional, even given Campbell’s well known serpentine method of dealing with journalists. Clearly, the two men don’t get on, and a lot of repressed fury poured out in the confrontation.

Boulton has been under momentous pressure during the election and is undoubtedly exhausted. Today he snapped.

Unedifying? Yes; understandable? Yes; but it was unprofessional.

I hope he keeps his job, though. He would be hard to replace.

Take a look. Make up your own mind:

John Evans