ED MILIBAND, leader of the opposition Labour Party, gave a very bad speech about Britain's economic situation today. It was so bad, indeed so self-defeatingly bad, that (at the risk of sounding rather parochial and hard-hearted) it sparks wider questions about the political consequences in Britain should recession lurch into full-blown economic catastrophe.

Speaking a few days ahead of the Chancellor of the Exchequer's autumn statement, Mr Miliband seized the chance to tell voters that Labour had been proved right about the government's austerity policies. We told you that the Conservative-led coalition was cutting spending too far and too fast, he said, and now we can see that "the biggest economic gamble in a generation has failed."

Mr Miliband went into considerable detail. His claims are worth quoting at some length:

The August 2010 Bloomberg speech given by Ed Balls, Labour's Shadow Chancellor, has turned out to be extremely prescient... Seventeen months ago George Osborne delivered his Emergency Budget. He did so against the backdrop of an economy emerging from a recession caused by the global financial crisis. There was momentum in the recovery, with growth reaching 1.1% in the second quarter of 2010. Unemployment remained a major concern, but it had started to fall. There was a large budget deficit that had to be brought down and difficult decisions that had to be made. So tough times, but a recovery underway. While we had argued for a balanced approach to bringing down the deficit, including significant tax rises and spending cuts, the new Government believed more drastic action was required. George Osborne made the case in his June 2010 Budget that it was necessary to go £40bn further and faster. Because if we failed to do so, he said we would face a loss of market confidence. He dismissed worries about the effects this would have on the recovery. And said his approach meant: “a credible plan to cut our budget deficit goes hand in hand with a steady and sustained economic recovery, with low inflation and falling unemployment.” He believed the Bank of England would be able to compensate for the impact of his decisions on tax and spending. And he argued that growth in exports would compensate for his squeeze on consumer spending and public sector cuts. We believed he was making the wrong judgement, engaging in a dangerous gamble... Of course the Government thought we were wrong. But so did some others. It is those people I want to make the case to today. A case based on George Osborne's own tests: growth, jobs, low inflation and his borrowing targets. Let's look at the facts. On growth, after the Emergency Budget we saw one more quarter of growth, before growth faltered in the final quarter of 2010. It has flatlined since then. In the face of flat growth the Government pointed to stable unemployment figures as a silver lining. Until they too turned. They've now been rising since March 2011. Worse, a fortnight ago we learned that there are now more than one million young people out of work... On inflation, the CPI has now been 4% or above for the entirety of 2011. For the last two months it has been 5% or over, in part because of the decision to raise VAT. So on growth, jobs and inflation it is clear that the last 17 months have not seen the scenario George Osborne set out. And the failures on growth, unemployment and inflation has had real effects on the deficit. The Government's own forecasts told us the cost of that failure back in March: £46bn additional borrowing in the coming years. More recent forecasts have put the figure at over £100bn... a catastrophic blow to the Government's credibility.

Painstakingly, Mr Miliband addressed the reasons given by the government for the current downturn and dismissed them. Notably, he argued that the euro crisis broke too recently to be responsible for Britain's woes. He made a pretty technical point about the balance of trade and how it signals that Britain's fundamental problem is slumping domestic demand. The Labour leader acknowledged the despondency some voters may be feeling, and offered a robustly Keynesian response, saying:

You hear it a lot these days. People saying, we're just in for a bad few years. It's one of those things. It can't be helped. Pretty much that's what you hear the Government saying. ‘Things might be bad under us, but you can't hope for anything better.' Of course, there are hard times ahead whoever is in power. But it was the depression of the 1930s that broke the idea that government was powerless in the face of hard times.

He listed the things that Labour would be doing differently: a slower pace of deficit reduction, a temporary 5% cut in VAT and the repeating of a tax on bankers' bonuses, with the proceeds to go to a scheme to put young people to work building affordable housing.

With every line, it came across loud and clear that Mr Miliband (and in the wings his ultra-Keynesian shadow-chancellor Ed Balls) really do believe that they are being vindicated right now. The speech today was a full-frontal rebuttal of the charge made by the Conservative prime minister David Cameron in Parliament this week, when he taunted Mr Miliband and asked:

Is there a single other mainstream party anywhere in Europe who thinks the answer to the debt problem is more spending and more borrowing?

Now, you could pick a number of economic fights with Mr Miliband's speech. Leave those for another day. This is a blog posting about the politics of the economic crisis, and of this speech. And the politics of this speech stink. Here is why:

1. Mr Miliband emphasises his consistency, flagging up that he is proposing the same solution to Britain's woes that he was a year and a half ago. Yet British voters, even those who barely follow the news, know that the economic dangers facing Britain and other countries have changed dramatically.

2. He is peddling a solution that involves more spending and more borrowing at a time when voters, even those who barely follow the news, can see that neighbouring countries in Europe are going through agonies because they spent and borrowed too much.

3. He is attacking the coalition for snuffing out a recovery that he says was building nicely before Mr Osborne took over. Does Mr Miliband expect anyone to believe that if Labour had won the last general election, Britain's economy would now be growing steadily?

4. With each passing day, it becomes more obvious to British voters that this is a global crisis of historic proportions. Nagging voters not to be fatalistic is not enough. The Labour leader says that governments are not powerless in the face of bad times. Well, I bet a lot of voters suspect that there is not that much that any British government can do to make this crisis go away.

5. A related point. Mr Miliband's solutions look at once reckless (because they involve more borrowing) and too small to be any sort of response to the global terrors swirling at Britain's gates. Again, Mr Miliband tries to neutralise this problem by acknowledging it head-on, saying:

Some people have criticised our plan for being too small to make a difference. Others, for being too expensive.

Acknowledging your opponents' counter-arguments up front is a clever wheeze, but it does not help you if those counter-arguments are more compelling than your own. British voters know that terrifying things are happening all around the developed world, and Labour is talking about a temporary cut in VAT and a make-work scheme for 100,000 young people. That is simply not credible.

6. Mr Miliband used a big speech about Britain's future to talk about the past. Specifically, he devoted great chunks of time to an appeal to all those who gave Mr Osborne the benefit of the doubt on deficit reduction a year and a half ago, explaining to them why he thinks they were wrong. He threw in praise for a speech Ed Balls gave in 2010 which he thinks now looks terribly prescient. What was he thinking?

Way back in March, I was left speechless by a press conference involving both Eds which effectively attempted to prove, with numbers, why Ed Balls would have been a better chancellor of the exchequer than George Osborne. I wrote then: "The job of the opposition is not to make voters regret their foolishness in rejecting the Labour party in 2010." The two Eds still do not get this.

As said at the top, this speech was so bad that it points to a possible broader lesson for the future: namely, that it would be wrong to assume that economic catastrophe will bring political rewards for Labour.

This is not to say that Mr Osborne and the coalition are safe. On the contrary, Mr Osborne faces a terrifying, fast-moving crisis that could leave his economic plans in disarray. But instead of saying just that, very simply, and stopping there, the two Labour Eds are stuck in a rut of obsessively arguing why they were more clever than Mr Osborne all along, and offering detailed counter-proposals that look to most voters like pea-shooters aimed at Godzilla.

Polls bear out the folly of the Labour strategy. Voters do not know if Mr Osborne's plans are going to work or not: an ICM opinion poll for the Guardian found them split 46% to 44% on the pace of deficit reduction. But when asked what is to blame for the latest economic slowdown, 30% of people said the last Labour government's debts, 24% the current government's cuts, 19% the banks refusing to lend and 18% the euro zone: ie, 67% thought it was factors beyond Mr Osborne's control. A Populus poll for the Times asked people who they trusted more to run the economy at the moment: 40% trusted David Cameron, George Osborne and the Liberal Democrat leader Nick Clegg. Just 26% trusted Eds Miliband and Balls.

In short, Labour lacks credibility in this crisis. In contrast, an economic catastrophe may yet be survivable for the Conservatives, if they can maintain a reputation for economic competence and steady, authoritative decision-making in a time of terror (a big if).

And the Liberal Democrats, junior partners in the coalition? Well, their whole plan for re-election was to be the kindlier, restraining element of the coalition that had delivered economic recovery in time for the 2015 general election, seeking credit for their fiscal discipline while pointing out where they had softened the roughest edges of Tory austerity.

If instead of a recovery Britain faces an economic catastrophe, I confess I struggle to see how the Lib Dems survive at all.