We are in for a time of austerity. Are we ready for it? The US Department of Commerce has just released its advance third-quarter gross domestic product figures. They do not look good. The economy contracted over the past three months, due to the deepest fall in consumer spending since the Carter administration. Disposable income fell 8.7 per cent. This is an international downturn. Shop sales in the UK fell for the sixth month in a row in September, according to the British Retail Consortium. The European Commission announced that consumer confidence in the eurozone was the lowest in 15 years.

We should worry less about the bigness of our problems than about the smallness of our character. We are out of practice at handling a world of repossessed cars, hand-me-down clothes and cancelled vacations and graduation parties. For many decades, people were steeled against recession by a knowledge that things could be a lot worse. Britain had memories of postwar rationing. In the US, 8m people were unemployed throughout the 1930s. Even people in their mid-40s may remember Edward Heath’s three-day week and Jimmy Carter’s “malaise” speech.