Since the "credit crunch" began in earnest, there's been little room to cut base rates – they're now negative in real terms – and an unreformed banking sector has anyway conspired only to lend, if at all, at rates which are much, much higher. State debts, meanwhile, have spiralled to such an extent that the entire world now questions the very solvency of many "advanced" economies. So the West is still in a hole – and yet, in stark contrast to the same point in the aftermath of other deep recessions, our previous policy blunders mean that taxes are now rising and rates are going up.