According to the head of the CBI - the relatively sane Richard Lambert - we're not going bust after all. He says:
"...the UK is not about to go bust. Our capital markets are deep enough to support the increase in government borrowing. And our flexible labour market and floating currency will make it much easier to adjust to the recession than will be the case for some of our continental neighbours."
What we must not do, he says, is "listen to the gloomsters".
And Lambert's not alone in dissin' said gloomsters: indeed there seems to be a concerted campaign against them, mounted by the economic establishment.
This morning, Roger Bootle ripped into the hedge fund gloomster who said it was all over for sterling. Yesterday, David Smith assured us that Britain is not Iceland. And Ken Clarke has even contradicted his own gloomster boss, denying that we will need an IMF loan.
So how can we tell if we are going bust? What would it feel like?
The first thing to understand is that a country going bust is not going to feel the same as a company going bust.
When a company goes bust, it means it can no longer pay its creditors, and the creditors are entitled to take possession of the assets. The assets - possibly including salvageable bits of the business itself - are then flogged off to repay the creditors. Pretty clearcut.
But when a modern country goes bust, it's a bit trickier to see what's happening. To start with, who's the debtor? If it's the government, or its agencies, that's one thing. But what if it's the country's banks, like with us now? Creditors can't go after the government for its banks' debts (or at least, they can't unless the government issues a blanket guarantee to all the banks' creditors, and surely no government would be stoopid enough to do that).
And even if it is the government directly on the hook, how can the creditors snaffle its assets? They can't grab the obvious things like the country's houses and factories, because those things generally don't belong to the government. They might try to grab the foreign exchange reserves, but in this scenario, they've likely gone already. And grabbing, say, the country's naval assets might prove a tad challenging - ours are kitted out with nukes.
But governments have a different sort of asset, which in some ways is much better than anything a company might own. Because governments have populations and economies under them. And crucially, they have tax raising powers. Unlike companies, they're not dependent on markets and customers for their money - they simply extract it from their citizens under penalty of law.
Indeed, back in the 70s, it was just such a thought that persuaded the world's big commercial banks that countries could never go bust. So it was perfectly safe to lend them huge amounts of recycled petrodollars. True, that whole deal turned a little sour when a bunch of Latin American dictators decided to default outright, but you can sort of see what the banks were thinking.
So what does that mean in terms of the UK's prospective bust? Given that during Labour's boom our combined overseas debts soared to an extraordinary and wholly unsustainable 300% of our national income (see chart above) - ie £170 grand for every British household.
Now, it doesn't mean that we're going to get closed down and have all our DVDs flogged off cheap like Woolies.
And it doesn't even mean that we'll no longer be able to get any further credit. So in that sense, it's not like a company bust.
But it does mean that any further credit is going to be very expensive - already the market rates HMG's credit worse than any other G7 government bar Italy (today's 5 year Credit Default insurance rate HMG debt is 1.36%pa, more than twice the French and German rates).
And it does mean that from now until you are very old and very grey, you're going to be taxed to buggery and back.
And it does mean that you'd better not try to use any public services, because they are going to be incinerated.
And there's something else. Those pound coins you carry round in your increasingly ragged pockets are going to buy a lot less than you've been used to. Because in the last six months sterling has tanked, losing a staggering one-third of its value against the dollar:
The bottom line?
When soothing establishment voices tell us that we're not going bust, ignore them. In effect, we are already bust.
We have huge overseas debts we cannot conceivably repay without a prolonged period of high taxes, poor services, and low purchasing power. In my book, that's going bust.
PS It's quite understandable that the economic establishment has decided to throw itself behind the Pick Yourself Up line from St Obama's inaugural address. It would be great simply to talk ourselves back to confidence. But even though it's generally recognised that Obama is Fred Astaire's love grandchild, somehow there really ain't nothing like the real thing. And since Mrs T is a lifelong fan of the late great Fred, let's remind ourselves exactly how he and Ginger picked everyone up during the Great Depression (Swing Time 1936, Pick Yourself Up, music by Jerome Kern and lyrics - not in this genius virtually one-take clip - by Dorothy Fields):