Samuel Brittan, the distinguished economics editor of the Financial Times, asked a very good question last Thursday: “Why should it be more alarming for governments to get into debt to put people into useful work satisfying human needs than to borrow for guns and tanks whose only aim is to kill other human beings?”.

There are two related issues he takes head on in this article, both of direct relevance to everyone in our area.

The first is to de-bunk the idea that a government’s budget is the same – only larger – as an individual’s or company’s budget.

On the face of it the similarity between the three seems like a no-brainer.

Charles Dickens put this idea into popular culture with what’s been termed the Micawber principle: “Annual income twenty pounds, annual expenditure nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

But treating the government budget like one’s home one is very far from a good idea. It was this which led governments in the 1930s to make a difficult situation much worse, and needlessly put millions more out of work.

As factories and mills faced cuts in orders and put people out of work, tax revenues went down, whilst the demands on the exchequer through benefit payments rose. To “balance the books” the government’s then response was to hit the unemployed the hardest with cuts in unemployment benefit, which of course turned the screw still further – jobless up again, tax receipts down again.

East Lancashire in particular paid for these policy errors with high and sustained unemployment in the 1930s.

Economists like Keynes – who asserted that there were fundamental differences between any home or business budget and the government, including the fundamental that governments set interest rates and decide on the supply of money – were dismissed.

It took a war to turn things round for our area. Which brings me onto Mr Brittan’s second point.

To get through the war the British Government had to borrow astonishing sums of money.

Even by 1956 – eleven years after the end of the war – total borrowing was 146 per cent of “gross domestic product” – ie national income.

That’s at least twice the level we’ll see from the heavy borrowing of the UK government today.

Far from the sky falling in with this level of borrowing in the fifties, then Conservative Prime Minister Harold Macmillan won the 1959 General Election with the slogan “You’ve never had it so good”.

Today world leaders are meeting in London at the G20, hopefully to agree to a plan of action to ensure that we all – in every continent – do not make the mistakes of the 1930s.

The failure in Mr Brittan’s words to borrow to put people into useful work was that a few years later we had to borrow even more to buy tanks and guns to kill people.

Beggar thy neighbour policies across Europe helped produce the tensions and impoverishment which led to the Second World War. We will not make the same mistakes again.