I don't disagree. But what I think also plays into this is the importance, in terms of the national economy as it is, of people spending money.

It's not just unbalanced household budgets, it's a national economy that is also unbalanced.

Spot on, an economy is always going to be largely dependent on the general public spending their money but as you say the balance has shifted too far. Of course if other imbalances in the economy, such as low wages, high energy prices and ridiculously high housing costs, were more fairly balanced then people would have more money to spend as well.

You would think, wouldn't you (and this overlaps with the other thread on the bedroom tax and policy) that the state of affairs we have at present would finally have kicked into touch the myth of rising wages as being the main cause of inflation?

But even after 30-odd years of downward pressure on incomes, and the cost of living rising substantially, and well above the official inflation figure (itself manipulated by successive governments for political reasons), it still seems to exist as the orthodoxy, along with the entire terror of inflation. Ha-Joon Chang is interesting on the issue of inflation [url=http://www.amazon.co.uk/Things-They-Dont-About-Capitalism/dp/0141047976/ref=sr_1_1?ie=UTF8&qid=1370608031&sr=8-1&keywords=ha+joon+changhere[/url – it's a standard piece of neo-liberal rhetoric and yet he explains why it's nowhere near the problem that it has simply become unquestioningly accepted as.