Read My Lips... No New Taxes

Gordon Brown's manifesto pledge not to raise taxes disappears in the bucketload of red ink in today's budget. British budgets are not generally events of global significance. But this one does signal something wider.

One tax rises and spending cuts are on everyone's agenda in the west. Two politicians will go back to their bases: the centre left will tax the rich and the right will cut back on services.

Everyone in the west will borrow more and try to reprime their economies so that the consumers spend, manufacturing revives and exports pick up. But will it do so before debt burdens overwhelm national economies? The UK will borrow 700bn pounds over five years.

One thing that appears to be on the horizon will be return of labour. I wonder about the workers' share of national income. You need it to be high to stimulate spending but not so much that it'll squeeze the bottom line. How politicians in the west react will depend where the sympathies of the middle class, which plays the central role in developed society, lie.