Osborne went considerably off the leash with his claims, saying that Labour secretly planned to raise income tax, and implying that civil servants had, in allowing the plans to be forged, given up something of their political impartiality. Stung, the servants told Osborne to drop the Hardy Boys schtick – the “secret plans” were actually in the public domain as part of the Budget, and the increase in income tax was tied to the ongoing growth in the economy.

He’s set in motion the kind of political Pokemon battle we get every election cycle, where each side fires its rhetorical magic at the other in turn, until one of them emerges the victor – so much for Osborne’s recent condemnation of electioneering. But with his vicious fireball deflected by the backroom staff, he was left dangerously exposed over the weekend. Mandelson, I choose you!

The business secretary and veteran political warhorse described Osborne thus: ”Like a boy in a man’s job”. Saucer of milk, etc etc, but while we wait for the homophobic reaction that dogs Mandy’s every move (let alone when he’s talking about boys and men) David Miliband has also slagged Osborne, describing him as “not a serious person”. He described the Tories’ tactics as “juvenile and student politics…the politics of the big lie and the big smear”. Treasury Chief Secretary Liam Byrne added: “this truth problem for Mr Osborne is becoming a pattern of behaviour”. Vince Cable meanwhile has managed to get mileage out of both his opponents in a single sentence, saying: “The public doesn’t need George Osborne’s imaginary secret documents or conspiracy theories to work out that the public finances are in a bad shape”. 

The Tories were also hurt by the Lib Dems rooting through their post-election plans and finding over £50bn of spending pledges that don’t really chime with Osborne’s prudence – new-school policies like high-speed rail sit next to classic Tory stances like cutting inheritance tax.

While it’s all good fun to see the internecine bitchery of The Hills get transplanted onto the UK’s political scene, this all seems like a case of electioneering distorting the genuinely necessary action. Cuts will be an inevitable part of the next government, whoever it is – the public discomfort at a rocketing deficit can’t be ignored. But the need to score points off and differentiate themselves from Labour has drawn the Conservatives, and to an even greater extent the Lib Dems, towards a economic model based on arch prudence. This is framed for maximum gain as brave and wise, positioned opposite Labour’s supposed recklessness with the public balance sheet.

But it’s too soon to make cuts, and using them as such a hot political topic is dangerous; fiscal stimulus needs to carry on for some time yet. Keynesian economists like Robert Skidelsky and William Keegan have written over the weekend about the importance of letting fiscal stimulus continue, Skidelsky with a simplicity that is either charmingly optimistic or dangerously reductive depending on your leanings: “Had the Government given everyone a spending voucher of £500 last Christmas, the chances are we would have had no output gap and full employment today!”

But for all the weirdly mechanistic and presumptive nature of Keynes, his ideas are still valid, and to ignore them for brief political gain would be disastrous. The recent crowing about the end of the recession, along with the City-minded political economists, means that talk of cuts might not seem too premature, but if the stimulus is cut back before much of the country has had time to feel it, then any future government could find itself with a hole where its income tax should be. Once the economy is genuinely growing again, with consumer spending steady, then we can start worrying about the deficit. At the moment, all the talk of cuts is only benefitting political strategists.

But when Paulson departs, who’s going to fill his clumsy shoes? The FT makes a good point today that “the eventual choice may be one that transcends politics”. The American people will just want the best person for the job, and with Obama mooting Powell as a member of his circle it seems that party lines are being blurred in the quest for change. Over this week we’ll have a look at the different potential candidates for the position.

New York Magazine suggests that if Obama wins, it’ll be Larry Summers, who held the post once before at the end of the Clinton administration. In terms of recent events, Summers expressed his support for the bailout plan, saying that “for the near term, government should do more, not less” – in America, this is still pinko commie claptrap to many people. It’s certainly more upbeat than Paulson saying, as he did when announcing the bailout: “Government owning a stake in any private U.S. company is objectionable to most Americans – me included”.

Interestingly, Summers suggests “investments in healthcare restructuring” as being a Keynesian path to economic rehabilitation. It doesn’t get much more Clinton than that; could nationalised health-care finally become legitimised in the eyes of the American public, as a way of spending the US out of financial turmoil?

So what else has Summers got up to? Well, he was tenured at Harvard aged just 28, eventually becoming president of the university in 2001. Since then he’s also become part-time managing director of D.E. Shaw, which is a technology-focused hedge fund, private equity and sometime venture capital company. Apparently they specialise in “investing in bankrupt companies with valuable assets”; presumably Summers will have to adapt to investing in non-bankrupt companies with unvaluable assets if he takes the Treasury position.

There are probable points against him, though, for his various beefs while at Harvard. He told Harvard’s African-American studies professor Cornel West to start taking his academic role more seriously after West made a rap record; West defected to Princeton over the ensuing row, nearly taking various other African-American studies professors with him. He also made comments highlighting reasons for why there should be fewer female scientists working at the highest level than male – the whole debate is so deeply mired in context that it’s impossible to say what was really meant, but suffice to say he annoyed a lot of female scientists.

That said, his reputation for opening his mouth a little too widely shouldn’t harm his prospects that much. Instead what will matter is whether Obama values freshness and bipartisanship over Democratic loyalty and experience.