We can't go on living the good life on a credit card

"The latest news is you're fired. Stay there!" The boss steps out at the sixth floor, hits "G" and sends the stunned trader down.

You hear stories like this from yesterday's Standard during any crash but the tales of crushed aspirations and summary dismissals as we wait for the next crisis stand out because it feels as if it will be terrible.

I say "feels" because it may not be so bad. America has escaped a recession so far, and if you think back, the dotcom crash was nowhere near as calamitous for London as the pessimists of the time predicted. Yet for all the qualifications, the mood of impending doom is everywhere. Yesterday it emerged that the inflation rate jumped to three per cent last month. I've seen the onset of recessions from the late Seventies on but have never seen people expect the worst with such certainty and fatalism as they do now.

A bloke in a pub tells me about his neighbour from the local estate. He managed to travel the world on borrowed money and stay in the best hotels even though he was a window cleaner who would never be able to pay off his debts.

An upper-middle-class friend tells me of a Crouch End couple who are living the good life on bad debts. Everything - the organic food, the school fees, the holidays, the fashionable clothes - is paid for by juggling tens of thousands between five different credit cards every month. They think they can carry on juggling forever, and she doesn't have the heart to put them right.

Even before Northern Rock went under, a debt counsellor from the Citizens Advice Bureau told me why she was sure we were heading for disaster.

When she began work during the recession of the early Nineties the world made sense. Her clients went bankrupt because they had lost their jobs and, catastrophically for them, couldn't get another one. Now, catastrophic consequences come from trivial causes. Debt has so stretched people that small changes - the loss of overtime, utility bills shooting up - push them over the edge.

I don't hear anyone telling debtors' tales with relish. The self-righteousness that normally accompanies talk of the fecklessness of others is long gone. Instead, people stare with wide eyes at a financial system which threw money around with such abandon, and wonder how it can retrench without fore-closing on hundreds of thousands. I know this is a post-Christian country but the atmosphere today remains authentically Protestant. From Gordon Brown downwards, we have not been frugal or prudent. We have erred, and expect to hear the Old Testament Prophet thunder, "Behold ye have sinned: and be sure your sin will find you out."