Relative to the 2000s, we have a weaker state, spending a larger share of GDP. The result is an economy barely capable of growth faster than 1%, with a shrinking tax base and a weak outlook.
In these circumstances, trying to deal with social needs simply through more spending, more debt and higher tax doesn’t really cure the patient, but rather limits the pain while accepting continued decline. Living standards cannot rise materially without growth. The problem goes deeper. If investment did rebound, and government borrowing continues at around current levels, we would then hit a binding balance-of-payments constraint.