As you know, there are those who believe the UK is as good as bust and we are on a one way course to oblivion. Either that, or Third World Status. If you were to read some of the opinions expressed in the Telegraph, by both its correspondents and bloggers, even that prognosis seems kind, and that actually, thanks to the incompetence of the Labour government, Britain is set to enter a New Stone Age.

Then you also get those who say things are not really that bad at all.

The last few days has seen both schools of thought getting their public airing

Nowhere is the debate more lively, than in the Telegraph.

Jeff Randall used his column to ask why neither Labour or even the Tories will tell us the truth. He quoted a Treasury spokesman saying: “given the continued uncertainty in the global economy, to fix each department’s budget now, for the next five years, is neither necessary nor sensible.” But, Mr Randall said that what the spokesman really meant was: “If Mr Darling told you now where the axe is going to fall, and how hard it is going to come down, the small chance that Labour has of being re-elected would disappear. Instead, let’s pretend we can keep spending more than we earn, all the way to polling day.”

But at the other end of the spectrum, Roger Bootle focused on the argument that countries don’t actually go bust. Governments can go bust, so can Kings and Emperors, but not countries. What counts, as far as UK PLC is concerned, is not the level of government debt, but who the government owes its money too. If it is debt to the British people, then clearly Britain itself is not under a mountain of debt. Mr Bootle said “According to National Statistics, at the latest count we had net external liabilities of about 7pc of GDP. By contrast, according to IMF figures Ireland, Greece and Spain have much larger net liabilities of 55pc, 70pc and 75pc respectively”. He went on to say that while around 30 percent of the UK’s government bonds are foreign owned, this is actually quite a modest figure compared to say the US, where the figure is closer to 60 per cent.

Then, yesterday’s business section of the Sunday Times was led with the headline: “City confident UK will avoid rating downgrade.” The article went on to say: “Leading City firms…..say a downgrade of Britain’s sovereign debt rating remains unlikely.”

On the other hand, Neil Woodford, at Investco Perpetual, was widely quoted as saying a downgrade in the UK credit rating is more likely now “than it has ever been”.

But, writing in the Times, Bill Emmott said in a piece headlined “Britain doesn’t need a dose of shock therapy” that the government needs to take its time, he said “restoring the public finances is a five-year task, not a matter of shock therapy. It does mean pain and probably conflict with public-sector workers. But it is an adjustment that Britain, flexible and quite entrepreneurial as it now is, is capable of making. How Britain will earn its living is no more uncertain now than it was a decade or even a century ago. Rather than the new national habit of self-flagellation, I would recommend an older British attitude: the stiff upper lip, combined with a certain quiet confidence.”

Again, in the Telegraph, Edmund Conway said he looked at data produced by the economists Carmen Reinhart and Ken Rogoff which appears to show that whenever net debt rises to over 90 per cent of GDP, then growth suffers. “Above 90 percent,” he said “median growth rates fall by one percent, and average growth falls considerably more. This is pretty worrying news for us here in the UK, where, according to the IMF, the OECD and most independent forecasters, net debt is likely to rise to around 100 per cent of gross domestic product. In other words, the high level of debt we are incurring will stunt our growth, potentially for decades.”

In a way though, the argument Mr Conway was making was a tad strange. For actually, in the study, Reinhart and Rogoff suggested that for as long as net debt is less than 90 per cent of GDP, growth is barely effected at all.

The truth is, the jury is out on whether UK’s net debt will indeed pass this 90 per cent level, and if it does, it seems likely this will only be for a short while. So in fact, Edmund Conway seemed to be using a study that implies that for the time being the UK’s government debt is affordable and will not hit growth, to argue the precise opposite.

This is part of the problem. Some commentators seem so convinced the UK is heading for disastert that they ignore all evidence to the contrary, and only focus on the evidence which supports their view.

Then there’s Mr Darling. Much press comment focused on last weeks’ damp squib of an attempted coup against Gordon Brown, The consensus seems to be that somehow, as result of the coup, that both Alistair Darling and Peter Mandelson have managed to wrestle some authority from their Boss. Now they are speaking their mind. The two men, goes the comment, are more worried about the UK’s fiscal deficit than Gordon.

Mr Darling for example said “My priority is to get borrowing down. Once recovery is established we have to act…The next spending review will be the toughest we have had for 20 years . . . to me, cutting the borrowing was never negotiable. Gordon accepts that, he knows that.”

The real truth however, is something no one dares speak.

Government spending cuts, means job losses, means less growth in the short run, but perhaps more growth in the long run.

But how can job cuts possibly be good?

The answer is this. Some people who lose their jobs working in the public sector will find themselves considering jobs and career opportunities that they may otherwise have ignored.

In short, cuts in government spending will effectively purge the economy, and force some people to begin new careers, and are then more likely to contribute to the UK’s wealth creation as a result.

It is not a palatable economic policy. The government that enacts such a policy may well be right, but if it explains it in those terms, it will suffer disaster in the election.

Maybe we can do no worse than to conclude with the wise words of Jack Nicholson in the film a Few Good Men. When the Tom Cruise character said he wanted the truth, big Jack replied” you can’t handle the truth.”