The leader of the Lib Dems, Tim Farron, struck a chord last week when he said that as a result of the Brexit vote, Britain had become a laughing stock abroad.

He is quite right. I myself have been receiving baffled inquiries from friends overseas. And on two recent trips to get away from it all – to Crete and Provence, since you ask – we could not escape. Everyone we encountered – yes, everyone – asked why this country had taken leave of its senses.

It is no good people saying we Remainers, or “Brits-in” as an acquaintance terms us, should shut up, accept that “the people have spoken” and get on with it. This is the biggest crisis to erupt in my working life, and the implications are far too daunting to be taken lying down.

Meanwhile, it is evident from its behaviour so far that the government is all over the place. But one thing is crystal clear: by making immigration the priority over membership of the single market, Theresa May is almost guaranteeing that, in order to offer sops to the Cerberus of burgeoning racism in this country, the economy will suffer.

In the past 43 years of membership of the European Union for which successive prime ministers fought so hard, we have become an integral part of the European economy. In addition, until this summer, we enjoyed, in George Soros’s words, “the best of both worlds” – being beneficiaries of our trading relations with the rest of the EU, while outside the eurozone and the Schengen arrangement.

While I have always been strongly European, I agreed with the many economists who argued that the eurozone was badly constructed, placing noble political aims over economic reality. The American economist and Nobel laureate Joseph Stiglitz, who is by no means anti-European, has delivered a powerful critique of the way the eurozone has produced lower growth than potential, and unnecessary and potentially dangerous levels of unemployment in nations that, frankly, were not qualified to join a fixed exchange rate system in which the principal beneficiary was Germany.

Nevertheless, the decision not to sign up to the euro – a masterstroke on the part of Gordon Brown and Ed Balls – did not diminish the advantages of being in the single market. Big business, and many small businesses, operate at a European level, with supply chains all over the continent. They are accustomed to the existing laws and regulations. Moreover, our membership of the EU is the principal attraction for all that inward investment that governments of both major parties have successfully attracted over the decades.

All this is being put at risk, as a result of craven acceptance of an “advisory” referendum whose result was almost certainly determined by the false prospectus offered by the Brexiters.

Even those in the Leave camp who complained that our sovereignty had been sacrificed to Brussels must wonder about a prime minister who last week brushed aside the sovereignty of our parliament when it comes to initiating negotiations with the rest of Europe. The following day, the health secretary reminded her and the rest of us that in this country “we don’t have government by plebiscite”.

I meet many people who express the hope that May is playing a clever game. Knowing the incompatibility of the Brexiters’ demands on immigration and continuing membership of the single market, and the years it would take to negotiate trade deals through the World Trade Organisation (WTO), they hope that the Brexiters will soon drive into a cul-de-sac, and normal service will be resumed. Of course, if the hit to the economy is as bad as one fears, we may find that net immigration from the EU reduces spontaneously as unemployed workers return home.

Meanwhile, there is a vociferous element in the (mainly) rightwing, Eurosceptic press saying “Look! The economy is fine. Brexit effect? What Brexit effect?”

Yes, consumers may have been on a spending spree during a remarkable summer, and London has been awash with tourists on shopping sprees, attracted by the cheap pound. Employment is still relatively high. But there are time lags in these matters. As Llewellyn Consulting has pointed out, investment plans are being cut back and the prospects for future growth are already deteriorating.

Now, most commentators are agreed that the Bank of England, in common with other central banks, is running out of monetary ammunition, and fiscal policy – the use of government spending and tax cuts – should be brought in from the ideological cold.

Indeed, on the eve of the G20 conference in China, US treasury secretary Jack Lew sounded an optimistic note about a resurgence of fiscal policy around the world. He even cited the UK.

The UK? I hope so, but I wonder. A lot of hope has been placed on our new chancellor Philip Hammond’s references to the need to “reset” fiscal policy. But there is a danger: remember the oracle at Delphi, whose ambiguous words could be open to dangerous misinterpretation? Noises emanating from the Treasury and the Institute for Fiscal Studies suggest there is already panic in the ranks about a prospective deterioration in the budgetary position as a result of the likely impact on tax revenues of Brexit. Might there be a reset in the wrong direction?