The Pre-Budget Report, delivered in soothing Scottish tones against the familiar parliamentary backdrop of green leather benches, is a peculiarly British affair.

But this year, setting aside for the moment the identity of the messenger and the furniture around him, the national economic policymaking ritual could be seen as just one, British, component, of a vast global effort to tackle the worst economic climate the world has faced in at least 25 years.

Gordon Brown and Alistair Darling are anxious to claim that Britain’s plight is simply a local part of a global crisis whose roots lie overseas.

It is highly debatable whether Labour’s stewardship of the public finances for the past 11 years fully bears out that claim but it is undeniable that the world is now embarked on an exercise similar in many ways to what the Chancellor announced yesterday.

Darling's £1 trillion debt gamble

Alistair Darling stored up big tax rises for the better-paid and huge public spending curbs in his fight against recession. Watch video

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The central plank of Mr Darling’s report – a massive increase in public borrowing to fight the threats of recession and deflation – is the same as the response by several of the world’s largest economies to the present crisis.

Even as Mr Darling was announcing his tax and spending plans, in the US Barack Obama was preparing to announce the principal members of his economic policy team.

The President-elect made it clear at the weekend that he wants a massive fiscal stimulus – tax cuts and spending increases - passed by Congress ready for him to sign into law once that team takes office on January 20.

China announced a hefty stimulus plan a couple of weeks ago, and at the meeting of heads of government of the Group of 20 nations in Washington ten days ago, the main European governments and others agreed to pursue similar proposals to try to lift their economies out of recession.

America’s likely fiscal stimulus seems the most similar to Mr Darling’s. Stimulate now, pay later, seems to be the principle at work, and shift the burden of payment towards the better-off.

In this respect the US tax plan likely to emerge in the next month or so is strikingly similar to part of Mr Darling’s package. Mr Obama’s advisers have indicated that they are thinking of postponing his planned tax increase for top earners until 2011.

That would mean that the top US tax rate would rise by a little under five percentage points in a couple of years. That increase would be aimed primarily at those earning more than $250,000 a year. That is remarkably close to Mr Darling’s proposed five percentage point increase on those earning more than £150,000 ($225,000) beginning in 2011.

Mr Darling’s package of spending measures – roads, green technologies – will also almost certainly be emulated by the Obama team, but there are crucial differences.

The Chancellor has opted for a cut in VAT as the main element of his plan. In the US, the bulk of the tax cut will be aimed at income tax paid by those on average and near-average earnings.

Most economists would probably agree that cutting taxes on consumption is a more effective means of stimulating the spending the economy needs. The risk of an income tax cut is that the money will simply be saved rather than spent. Since the US has no national sales tax, however, that option is not available.

The biggest difference between Britain and the US plans will almost certainly be in scale. An extra £20 billion in stimulus measures may sound a lot of money but it represents about 1 per cent of British national income.

Contrast that with the $500 billion to $700 billion in stimulus that some of Mr Obama’s advisers are talking about: between 3.5 and 5 per cent of US GDP.

The problem with the British measures may be that they are just not large enough to deal with the threat. The US is throwing caution to the wind, even though its fiscal position is not noticeably different from that of Britain. The budget deficit in the past year has been about 3.5 per cent of GDP, and seems likely to rise as high as 8 or 9 per cent of GDP in the next few years: just like Britain’s.

What is more, like Britain, the US is starting from a position of relatively low total public debt in proportion to GDP – both are about 60 per cent – on common accounting measures, meaning that a few years of big debt build-up could be accommodated without blowing an irreparable hole in the Government’s balance sheet.

So why is Britain not emulating the US in going for broke?

The answer is that Britain is much more vulnerable to further meltdown in the financial system. As bad as it is, the total size of the contingent liabilities of the US banking system is probably no more than 30 per cent of US GDP.

In Britain the number is probably between 200 and 300 per cent. If a large chunk of that eventually has to be met by the Government, the scale of the fiscal crisis would be awful in America but literally catastrophic in Britain.

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