As always with Balls, there are exaggerations, inconsistencies and half-truths aplenty. Part of the problem is just that his reputation precedes him: so it's funny to hear this disciple of "no more boom and bust" say that, "the first lesson I draw from history is to be wary of any British economic policymaker ... who tells you that there is no alternative." And, in the context of the Labour leadership battle, it sounds awfully convenient for him to say that his party needs a plan to reduce the deficit, but "only once growth is fully secured." But there are more fundamental flaws with the Balls thesis. Like Brown, he boasts that, "We came through that storm without seeing the spiralling rates of inflation, interest rates, unemployment and repossession". This may or may not be commendable, but it also misinterprets the sitation. Inflation hasn't skyrocketed because this isn't the same kind of inflationary recession that we've seen in the past. It is one built on both public and personal debt. A failure to get to grips with that debt merely entrenches the conditions for another downturn in the future.
Oh, and when Balls says that "George Osborne ... is planning to go £40 billion further and faster this year than even Alistair Darling’s plans," I'm sure he must mean "over this Parliament," not "this year". Because that's the truth.
The main problem for Balls, though, could be if his doom-laden forecasts don't translate into reality. As Jim Pickard says over at the FT Westminster Blog, the former schools secretary seems to have staked his reputation on the idea that, in his words, "the hurricane is about to hit". If we stumble back into recession, then expect him to gloat all over our television screens. But if it doesn't, then where does that leave Balls's economic judgement? After the mess he and Brown conspired to get us into, I'd think that his career could barely withstand another You Were Wrong All Along moment. Besides, even if we do enter double-dip, then the government might be able to argue that it started in America – and more reasonably so, this time.
For all the flaws, though, Balls's speech shows exactly why he remains a danger to the coalition. It has a swagger and purpose to it that none of the other Labour leadership contenders could muster, and no doubt it will resonate the party faithful. Whether it's enough to drag him back into leadership contention, I'm not sure – but it is one of the defining moments of a contest which has so often lacked vitality and vigour. Look on it more as Balls's pitch for the shadow chancellorship. And, if he gets that job, we will really see his arguments put to the test.