We seem to be besieged by the budget cutters; the financiers and politicians who tell us that our economies are doomed unless we plug the hole in our public finances and balance the books. "The sooner the better!" they cry, implying that immediate action is needed lest financial credibility is lost and we become another Greece or Ireland. Yet, as most economists will tell you, cutting expenditure now would send Britain back into recession.

Madeleine Bunting summed it up admirably in her Guardian column of 7 March - it's like turkeys voting for Christmas. We are in for the direst period of public expenditure cuts since Thatcher came to office, regardless of which party (or parties) is in government. Despite muted disagreement about the exact timing of the cuts, all parties agree that the axe must fall. There has been virtually no public debate. Once again, most Brits have meekly acceded to the strident calls of the redtops and blacktops alike-and, unlike 30 years ago, there is no well organised trade union movement to protest against it.

A lost generation
Of course, the case against this received orthodoxy can be made. And indeed it has, by organisations as diverse as the IMF and the Resolution Foundation. Professor David Blanchflower, formerly of the Bank of England's Monetary Policy Committee, has warned not merely of a double dip recession, but of the impact of long-term unemployment on the current generation of 18-24 year olds who can't find work. They are at risk of becoming a "lost generation" in the sense that by the time the economy once more begins to generate new jobs in sufficient numbers, they will be in their late 20s or early 30s.

Some may find jobs, but when you have a large hole in your CV it's difficult. And when you do find a job, it's unlikely to be at a skill level or wage reflecting your qualifications. This "echo effect" resounds over the whole of your working life. By the time you reach retirement age, you will have earned several hundred thousand pounds less in cumulative terms than would be the case were you in work today. That's the difference between owning a house and living forever in a council flat - and it's a disadvantage you'll transmit to your children.

Arguing against Osbornomics
How do you argue against the George Osbornes of this world? You can use Keynes's "paradox of thrift" argument. An economy cannot be run like Mrs Thatcher's corner shop; the more people save, the less they spend, the weaker is aggregate demand and hence income and employment. You can use the microeconomic version of this: Madeleine Bunting cites our pamphlet, In Place of Cuts, in which we show that for every £25,000 per annum job slashed, the public purse gains only about £2,000 - and that's before counting the measurable damage society incurs as a result of high unemployment.

There's another point, too. While the private sector was busy "downsizing", most of the million or so jobs created in over the past decade have gone to women working in the public sector. What is certain is that the burden of public expenditure cuts will fall disproportionately on women. Where will that leave the single mothers whose entitlements are tied to being employed? Perhaps Lord Layard would like to reply.

Too many seem to accept the central precept of Thatcher's "Handbag Economics"; ie, because the corner shop must "balance the books" to survive, so too must the government. I was lucky enough to have been taught enough economics at an early enough age to recognise that this is a shoddy assumption, but then I am from a "Keynesian" generation, a generation in which Labour (and indeed some Conservative) politicians could recognise that the human cost of the Great Depression had been nearly as great - and very certainly as avoidable - as that of the Great War.

Economic hinterland
Today, few university Economics courses contain much discussion of the history of economic thought. I have even heard graduates with degrees in Economics pronounce the name of Keynes as though it rhymed with the new town of Milton Keynes. Few could trace von Hayek back to the libertarian and violently anti-Marxist Austrian school - indeed, von Hayek once famously dismissed Milton Freidman as a "Keynesian" because Friedman distinguished between micro- and macro economics. Fewer still could discuss What Adam Smith meant by "wealth creation" or why Marx so admired the French Physiocrats for their theorisation of how surplus value was appropriated in a pre-capitalist economy.

"What has the above got to do with the price of eggs?" you may ask. Quite a lot, in truth. People are moved by ideas and ideology, but they are too often the unknowing slaves of some defunct economist, as Keynes famously said. If people seem unmoved today - if so many are like turkeys voting for Christmas - it has much to do with New Labour's disdain for ideas and history as with its addiction to the defunct financial theories of the all-knowing market which still dominate Wall Street and in the City of London.

George Irvin, SOAS, University of London