For the time being, though, we in Britain are sitting pretty. The fact that this is the message that Gordon Brown will deliver in his Budget speech on Tuesday does not make it any the less true. The Budget is all but certain to be the finest distillation yet of New Labour's radical centrist agenda. It will stand as proof that there is a Third Way between red-in-tooth-and-claw American capitalism and statist continental European social democracy. In just 22 months the Government has indisputably demonstrated its competence to manage the nation's pounds 350bn in annual incomings and outgoings. It is true that Brown & Co underestimated the impact of the Asian financial crisis, and that the pound is too high for exporters, but the state of public finances is healthy. Inflation has almost disappeared. Unemployment has not been as low for 18 years. Forecasters tell us the UK will hit the low point in the current economic cycle this summer, then begin to grow again at a better rate.
The two major themes of the Budget are likely to be enterprise and fairness. The political message here - turning the vintage Tory ad on its head - is that Labour is working. The economic message is that UK plc must lift its game to compete in world markets. The Chancellor is expected to announce new tax cuts for small firms that will boost research and development, capital spending and employee share-ownership. Brown may well play down wealth-creation and play up wealth-redistribution to underpin New Labour's old Labour credentials.
It is still possible that the Budget speech headline will be the announcement of a new 10p rate of tax. Not only will the new low tax be presented as fair, it will be presented as consistent with making Britain more enterprising. A new low tax band should encourage workers at the bottom end of the wage scale to look for work, because there will be more in it for them to do so. There are likely to be other measures affecting the country's pounds 100bn- a-year social security system. Here the theme will be a gentle redistribution of the nation's wealth from the middle class to the poor. Middle-class taxpayers may find the last of their mortgage relief gone. They may find that their child benefit is taxed.
The question as the Chancellor sits down at the end of his speech, to wild applause from his back benches, will not be: was it a success? Almost certainly it will be a triumph. The question will be: where does the Government go from here? And the answer is: in one of two quite different directions.
New Labour may just now really be coming into its own. Brown's speech could set the stage for take-off. In this case, we can all happily look forward to modest improvements in our standard of living based on more social justice, as the rest of the world rocks and shakes around us. Perhaps, after all, Brown's New Deal - using the pounds 5bn from the windfall tax to retrain those on the fringe of society for productive work - will succeed better than previous job training schemes.
On the other hand, Tuesday's Budget speech may come to be seen as the high-water mark for New Labour before the slide began. The risk is that Third Way policies, for all that they are working now, will be too flimsy to withstand serious bad news from outside the country: trade wars, a stock market crash, global deflation. The risk is that the Third Way will eventually look not like a distillation of the best of two systems, but an unsuccessful fudge between the two. But the whole world is risky now. What we have here, almost uniquely, is a government confidently going hard for growth on the foundation of social justice.