I'm afraid there's no money left, the note read. It was written, only half in jest, by the outgoing Chief Secretary to the Treasury, Liam Byrne. But it could have been addressed to almost any government or individual in the developed world. As America wrestles with its debt ceiling, the eurozone struggles with its members' insolvency, and the rest of us try to cope with falling incomes and rising prices, a dearth of money is forcing us all to see ourselves through a different lens.
Literally, in some cases. At the weekend, I bumped into an old friend, a former fashion editor. As we went outside and put on our shades, she said that mine trumped hers. "I doubt it," I replied. "They only cost a fiver." She, always immaculately turned out but now looking slightly disappointed, admitted hers cost £15. Where you might have expected designer rivalry, we found ourselves engaged in competitive frugality.
Five years ago, at the height of the absurd debt-fuelled boom, you couldn't open a newspaper or magazine without reading about "must-have" handbags costing a thousand pounds or more. Now people are questioning what they genuinely must have. When food and housing take up such a large slice of their income, do they really need a car, let alone a pointless pair of designer heels? The excesses of the past look pretty sick now that we're living in what our parents might call "reduced circumstances".
It's not fun being poorer, but there's at least a certain satisfaction to be had in making money go further. You can now download an app that tells you not just where your nearest petrol station is, but how much it charges per litre. Instead of seeking happiness by going shopping, we are achieving some of that gratification by finding new ways of saving money. As the Romans knew, there's something to be said for a purge after a binge.
The trouble is, the decline in household consumption, which is necessary for people to pay off debts, is disastrous collectively for the economy. After the previous three recessions, in the 1970s, 1980s and 1990s, it was our consumer spending that dragged the economy back to growth. This time, household spending fell sharply in the first year of the downturn and has barely picked up since.
It's not surprising. Real household disposable income has been falling for two-and-a-half years, faster than at any time since the data were introduced in 1955. At the beginning of this year, we were £8bn poorer than we were at the end of 2008. Worse may be to come. The public-sector cuts have barely begun to be felt, and interest rates are still artificially low. What's more, we entered the recession with lower savings and higher personal debt than in previous downturns.
Americans are facing the same problems. Like us, they lived for too long on borrowed money – both individually and as a nation. But their fiscal austerity is only just beginning. Whatever deal emerges from Congress, there will have to be savage cuts in spending. What will that do to America's image of itself? George Bush started two wars, which have so far cost his country £2.4trn. The Pentagon will surely not emerge unscathed by spending cuts. Expect a lot of questioning about whether America can remain a superpower if there's no money left.
Political parties on both sides of the Atlantic are having to reassess their thinking too. A Conservative asked me the other day: "What's the point of Labour if there's no money to spend?" It's a good question, but you might also ask: "What's the point of the Tories if they can't cut taxes?" The two easiest routes to popularity for left and right have been blocked off by debt. And so has the easiest way to stimulate growth, a problem that has been perplexing George Osborne.
No wonder people are complaining that there are no new ideas coming out of Labour. Most new policies cost money. There are a few – such as moving the clocks an hour forward or decriminalising drugs – that might add to the happiness of the nation while actually saving money, but they're thin on the ground.
The one thing government can still do is change the rules. So it can, for instance, alter planning regulations to make it easier for councils to protect and encourage independent shops. That requires no spending, but it would improve our local high streets. Ministers can also help to make housing more affordable by relaxing planning rules to allow more housebuilding. Neither of these cost the Treasury a penny.
Politicians have been struggling, though, to fire our imaginations in a world with no money. David Cameron tried with the Big Society, but it hasn't really caught on, and too many people see it as a cover for government cuts. Ed Miliband has recently come up with some interesting ideas on responsibility but they haven't yet coalesced into a political programme.
It's probably time for us to change our expectations of politics. We still want our politicians to do stuff and haven't quite accepted that doing stuff generally costs money. Just as we are having to get used to austerity at home – no foreign holiday this summer – we also need to lower our horizons as voters. For if we keep demanding more from our leaders, the only reasonable response they can give is: "I'm afraid there's no money left."
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