There has been much talk recently about borrowing and deficits. Listening to some people one would think that the idea of State borrowing for capital spending was some kind of dangerous fiscal heresy. For the last 30 years or so Exchequer deficits have been the norm. Every year the Government would run a deficit on the current account and increase it to fund investment in housing, roads and infrastructure generally. It was only in the mid '90s that we managed to balance our current spending. Even then it was considered quite normal – desirable even – to continue borrowing for capital purposes. Indeed, I am not aware of any commentator who said, at the time, that we should not engage in capital borrowing. It was only in the late 1990s, during the first term of the present coalition, that we reached the enviable position of not just running a current budget surplus but actually running a surplus so big that we did not need to borrow for capital purposes. That was a very fortunate position to be in but, in retrospect, I am not sure how sustainable it was in a liberal democracy, with a dynamic and expanding economy and a fast growing population.