The Price Of Winning

The Bank of England governor is right. The real truth of the British election is that all three major parties are engaging in massive fiscal dishonesty. Only the Tories have grappled with reality when they summoned up the guts last fall to propose and describe the vast and deep cuts in public spending required to prevent Britain becoming another Greece. But as soon as this burst of honesty and candor emerged, the Tories started to slide in the polls and then partially reversed themselves, pledging to enact relatively piddling cuts if they win power, while leaving all the major fiscal drains, especially the National Health Service, intact.

That's why this is as much a phony election as it is a riveting one.

The Lib-Dems are actually offering huge tax cuts (with spending cuts delayed until a recovery is robust). Labour acted like Bush Republicans in exploding the debt in good times (yes, Blair and Bush were closer domestically on fiscal issues than either would care to admit). The Tories know they are going to have to be Thatcherite but can't dare claim her still-unpopular mantle (the Brits, in my opinion, are an electorally ungrateful lot. Just ask Churchill.).

And so whoever wins this election will inherit the kind of crisis Obama inherited, but without the dynamism of the US labor markets and the sine qua non of a reserve global currency. It's gonna be brutal. Which is why sharing some of the blame in a coalition government - between Tories and Lib-Dems - may actually appeal privately to Clegg and Cameron more than they are likely to say so in public.

(For the third time, I'll be live-blogging the final British debate this afternoon. I'll also be on BBC America tonight discussing it.)