HOUSE prices got us into this mess, and the Chancellor hopes they will get us out of it as well.

Or rather, that subsidising wealthy families to buy first and second homes will drag the economy out of recession.

The Help to Buy scheme is one of the most reckless rabbits ever plucked out of a chancellor's top hat. It's a bit like the Cyprus government asking Russian oligarchs to lend them some more hot money to see them through their debt crisis. It is a transparent bribe to Tory voters in the south-east of England, and an insult to hundreds of thousands of families who can't take on debts because their earnings are falling.

Financial advisers are already devising clever schemes to allow wealthy parents to buy second homes for their children, relatives or – under suitable familial disguise – themselves. It's a steal. You put up £30,000 for your son or daughter and the Government puts up £90,000, interest-free for five years, to make up the £120,000 deposit. Hey presto: you acquire an asset worth £600,000.

For families with a bit of cash in the bank that's not earning any interest, this is a dream investment. This government insists the scheme can't be used for buy-to-let investments, but there's nothing to stop your offspring selling the house on in future and releasing capital gains to buy flats.

Osborne hopes this will deliver a short-term boost to house prices, which are looking pretty wobbly as Britain flirts with a triple-dip recession. Labour won its two biggest election victories on the back of a doubling and then tripling of house prices in a decade. The Tories want a piece of that. So, £130 billion of public money – nearly equivalent to the spending on health and defence combined – is to be placed at risk to push prices higher. This is the "aspiration" nation.

But there is a very good reason why mortgage lenders are demanding 20% deposits right now. It is because by any reasonable standards, British properties remain over-valued. Unlike in the US, where house prices have fallen 35%, here in Britain they have been largely stable, thanks to near-zero interest rates and other housing subsidies like the tax concessions to buy-to-let investors.

But with average earnings falling and house prices out of reach for the majority of middle earners, the banks have rightly concluded a correction can only be a matter of time. They foresee a 20% reduction in house prices as being the most reasonable assessment of the market, and they want that 20% to be lost by home buyers rather than them. It is a simple assessment of risk.

However, the British Government appears not to care about the risk to public money. If house prices do fall, three-quarters of the losses will be paid by the taxpayers – by you and me. Why does George Osborne think he can get away with this irresponsible use of public funds? Well, the Chancellor is clearly banking on his other flexible friend: inflation.

Hidden away in the Budget verbiage was a reference to "unconventional policy instruments", of which the Bank of England is being invited to use more. This is money printing, which the new governor of the Bank of England, Mark Carney, is thought to rather favour because it will boost inflation. Osborne insisted the inflation target would remain 2%, which is unbelievable – it hasn't been anywhere near that level in the last four years. Now that the mandate of the Bank of England is to be changed to allow for higher inflation, only a fool would believe the inflation target still exits.

If inflation leaps back to 5% a year, as is only too likely, house prices will fall (in real terms) without home-owners realising it. Job done. This will of course hit people with savings, pensions annuities and fixed retirement funds and will reward those with debts they have taken on that they can't afford. It will also benefit the banks. But the calculation is that most older people will be getting the £155-a-week pension and so won't notice. Why do you think they brought this new non-means-tested benefit forward by a year?

It's a sneaky trick. But people don't seem to quite understand how inflation works. There's been rioting in the streets and government defeats in Cyprus over the proposal to impose a one-off tax of 10% on bank accounts. People feel they are being robbed, and they are. There is supposed to be a bank-deposit guarantee in Europe of €100,000. Not any more it seems.

But in Britain people have lost nearly 10% of their savings in inflation over the last five years without apparently noticing.

The British economy is being turned into a vehicle for protecting the financial interests of a narrow section of the Conservative vote. We are told the country is living beyond its means, spending more than it can afford, borrowing when it should be saving. The Government could have used the £130bn to underwrite loans to businesses and jobs. Instead it has tried to blow up another housing bubble. It is Weimar economics.