Indeed, as a proportion of national output, the size of the USA's deficit reduction would be similar to that seen after the 1981 Budget in the UK. Like the 364 more than three decades earlier, hundreds of American Keynesians warned about the dangers of an alleged "fiscal cliff". Unless the tax cuts were restored, they envisaged a sudden plunge into the abyss for the American economy in 2013. Stiglitz told the Daily Telegraph that the cut in the budget deficit might push the world's biggest economy back into recession. In his words, "It's unambiguously the case that these measures will slow down growth . . . There is a significant probability of going into a recession." Krugman joined the jeremiahs, although he thought the phrase "austerity bomb" was more expressive than fiscal cliff. In November 2012, only two months before the tax increases were to come into effect, former US Treasury Secretary Larry Summers judged that "the fiscal cliff must be avoided".

But major tax increases were implemented and the US budget deficit did fall sharply. We now have all the important macro data for 2013. What happened? The answer is that the American recovery chugged along much as before, as if it couldn't give a damn what Professors Krugman, Stiglitz and Summers thought about the matter. Exquisitely (to recall Nigel Lawson's word), the increase in real domestic final sales was higher (at 2.6 per cent) in the year to the final quarter of 2013 than in the preceding year (2.2 per cent). On the Krugman/Stiglitz/Summers analysis the plunge down the cliff face ought to have been most terrifying in the third and fourth quarters of 2013. In fact, these two quarters saw strong demand growth relative to their neighbours.

As with the 364's doom and gloom about the 1981 Budget, the hundreds of American Keynesians' gloom and doom about the fiscal cliff proved unjustified. Once again, Keynesian fiscalism was wrong.

The International Monetary Fund's statistical department has done a particularly good job over the years in preparing data on fiscal and monetary policy for dozens of countries, and putting the numbers on a comparable basis. However, under Olivier Blanchard, its chief economist since 2008, its macroeconomic analysis has veered too far in the Keynesian direction. Not only was he in the Krugman/Stiglitz/Summers camp on the fiscal cliff (which he characterised as "potentially an enormous shock"), but he also saw it as one of his responsibilities to condemn George Osborne's commitment to a smaller budget deficit in the UK.

In April 2013, when the outcome of the USA's cliff drama was not yet known, he rebuked Osborne for fiscal austerity. According to Larry Elliott in the Guardian, Osborne was "under mounting pressure to moderate his austerity strategy after the IMF went public with fears that the pace of budget cuts is too severe for Britain's ailing economy. The fund said it would be holding talks with the chancellor about his tax and spending plans in the wake of gloomy forecasts that subjected the UK to the biggest growth downgrade of any developed country for 2013 and 2014."

So here too was a showcase experiment. Indeed, Blanchard's anxiety about the UK's fiscal stance was a late instalment in an intellectual soap opera that had been begun in 2010, when Osborne first made clear that deficit reduction would be one of his priorities, even perhaps the main priority of his Chancellorship. The Keynesians, who — as we have seen — had been dormant for a generation in Britain after the 364's humiliation, started erupting like a newly active volcano. An explosion of letters to the editor, research papers and pamphlets renewed the debate on fiscal policy, while new books proclaimed Keynes as a resurrected messiah.