Finally the penny has dropped in No 10. The prime minister, Theresa May, has recognised that the English health service does not have the resources it requires to provide high-quality patient care, and has told the Treasury to “find the money” the NHS desperately needs. Mrs May seems to be offering to increase the budget of the English NHS by about 3% a year until the end of the parliament, meaning that government spending would rise from around £130bn to £150bn in four years’ time. While welcome, the sums are probably going to be too small to keep pace with the rising cost of drugs and an ageing population that has ever more complex needs.

The decision is not an act of compassion. It is not a birthday gift – although it might be sold as such because the NHS is 70 this July. It is not because there is a Brexit dividend – there isn’t. It is because the NHS is falling apart before people’s eyes. GP appointments are harder to come by. Patients routinely sit for hours in overcrowded emergency wards. In hospitals, operations are cancelled more often, because of a lack of beds. Jeremy Hunt, the health secretary, deserves credit in arguing for extra money. But Mrs May will find the cash because public dissatisfaction with the NHS is at its highest level for a decade. Politics demands that she acts.

The Tories have no one else to blame for this sorry state of affairs but themselves. Conservative ministers spent the last eight years bleeding the health service dry. Like physicians of old, Tory policymakers believed that bloodletting could heal the sick. It was wrong in medicine. And it’s wrong in economics. It has not just inflicted pain; it has made the patient weaker. Other parts of the system have succumbed: social care offered by local authorities has been decimated by austerity.

Mrs May does not want to be remembered as the prime minister who squandered the dramatic improvements that had been achieved by the NHS. Despite the longest budget squeeze in its history, the NHS was last year judged the best and safest healthcare system of 11 developed nations. Unsurprisingly, given austerity, the NHS was reckoned to be cheaper to run than other healthcare services found in comparable economies. What the health service needs is the kind of vision that Tony Blair and Gordon Brown offered almost two decades ago when they decided to raise health spending to the EU average.

Before spending more money on the NHS, British politicians should take the advice of the US economist Stephanie Kelton: in a UK lecture this week, she explained that it was wrong for politicians and the media to argue that the government must balance its books, just like a household. If a household were to continually spend more than its income, it would eventually face insolvency; it is thus claimed that the government is in a similar situation. This is false.

Yet politicians are obsessed with avoiding an increase in the deficit, an impulse so ingrained that Professor Kelton described as it “almost Pavlovian”. An analysis of the UK’s economic position tells us how to fund the NHS: growth is flatlining, real wages are stagnant and there’s little inflation. The UK’s indebted households are sinking deeper into debt. Hardly the time to raise taxes. The public sector deficit ought to be seen as an instrument to support the economy, not a way to break it. To pay for the NHS, which is critical for long-term prosperity, the government should engage in Keynesian deficit spending: this would help to keep not only the public healthy but the economy too.