Whatever else it may be, the downgrading by one agency of the UK's credit rating from AAA to AA1 is a mark of failure. The Conservative manifesto at the last election promised: "We will safeguard Britain's credit rating with a credible plan to eliminate the bulk of the structural deficit over a Parliament." That pledge now lies in small pieces, and the objective of eliminating most of the structural deficit has receded into the slightly snowy distance.
Whether the loss of a triple-A rating was partly caused by the Chancellor's policy, or whether it was the result mainly of unexpected sluggish growth in the eurozone, there can be no doubt that George Osborne did not intend to find himself in this position 33 months into his tenure of the Treasury. This newspaper agrees with the Shadow Chancellor that Mr Osborne made the mistake of cutting the deficit too sharply, and that this stifled consumption and investment and therefore growth. But there would have been risks in Labour's policy too of more inflation, and that the Government's credit rating would have been downgraded further and earlier, raising the cost of public borrowing.
In any case, that debate is becoming marginal. Mr Osborne has been forced by events to do much of what Mr Balls, and Alistair Darling before him, advocated, putting off the point at which the national debt starts to fall as a share of income. And, although Ed Balls said yesterday that borrowing more was "what I would do now", it is not what Labour will promise to do by 2015. Politically, it would be too hard to fight an election against a government that had failed to control borrowing by promising to borrow more. Such an argument will become ever harder to make if, as Hamish McRae argues today, the Moody's downgrade marks the start of a gradual increase in the cost of borrowing in the long run.
What matters now is what the Chancellor can do to crank up growth in the next couple of years. There are many sensible things that can be done, and Mr Osborne should try all of them. Perhaps the two most important are to get the banks to lend to businesses again, and to accelerate public-sector capital spending.
On the first, the temptation has been to wait for Mark Carney, who takes over as Governor of the Bank of England in June. However, if there are changes that could be made, they should be made straight away. Vince Cable, the Business Secretary, suggested last week that the Funding for Lending Scheme needed further work to ensure that new money went to small businesses. The scheme was launched last summer to use the Government's credit to underwrite new lending, and it has had some success in stimulating the housing market, but less of an impact on business lending.
As for capital investment, the London School of Economics Growth Commission recently published a "manifesto for growth", which emphasised the long-termism of higher educational standards and more research and development, but which also called for "investment in transport, telecommunications, energy and housing". Its authors pointed out that "UK investment is heavily skewed towards property and buildings rather than equipment, innovation and new technologies".
This bias needs to change, and the test of next month's Budget will be the extent to which Mr Osborne succeeds in changing it.