The world’s economy got into a mess as a result of gorging on cheap credit. Thus far, the only solution is a ‘hair of the dog’ one. In other words, toss more cheap money at the problem in the hope that an extended period of liquidity (i.e. lots of money sloshing around the economy) will ultimately induce sufficient commercial activity to restore solvency.

It’s a dangerous gamble, but no less of a gamble than banks took when they made all those sub-prime loans to NINJAs (individuals that had No Income, No Job, and no Assets). Actually, it’s criminal what those bankers did. The amazing thing is that they’re all getting off scot free; they’ve kept the bonuses they earned in the process, and governments ‘happily’ shifted the problem onto their balance sheets. OK, rant over.

The thing is this, governments operate under similar principles as businesses. They have income (taxation), they have expenses (the fiscal budget), and when the two don’t balance they borrow. Reduced economic activity is having an obvious effect on tax revenues at the same time as governments are under pressure to spend more money in an attempt to kickstart the economy. In a normal commercial enterprise the managers would ‘cut the cloth’. This could, kind of, be manageable if politicians didn’t run governments, but politicians always have to have the next election in mind while they’re implementing the promises from the previous one. In short, they have to be careful not to piss the voters off too much.

It has become increasingly fashionable for governments to table ‘austerity’ budgets. Satisfying their growing debt obligations is only possible if they reduce their expenditure. But the populace of developed economies have become more than a little addicted to the benefits of governments’ spend on various social programmes. I get a sense that the budget cuts are much less severe than a pragmatic numbers person would implement.

We could be in for a gruelling time as austerity makes its way around the globe. Interestingly, the word is derived from the 19th century phrase “to get one’s gruel” (i.e. punishment). Gruel, of course, is food one wouldn’t normally associate with the banker class. It’s historically been for poor people, and it doesn’t have any good connotations.

However, it doesn’t need to be this way. Gruel and soup are closely related, and soup may ultimately be the solution to many people’s budgetary problems. Also, based upon my experience of eating nothing but soup for two weeks after a throat operation a few years ago, it is also a slimming diet.

So, my advice is to make a big pot of delicious, wholesome soup on a Sunday. Load it with low-GI, low-fat, super-healthy pulses (think lentils, peas and beans). You could add some meat or chicken stock for additional flavour, but it’s as good if you keep it vegetarian (or even vegan). Take a container of it to work every day for lunch, and make austerity work for you. Yes, you’ll save money at the same time as doing good for the environment and your body.

It all comes down to liquidity. I know for certain that a liquid component to one’s diet (i.e. a nutritious soup for lunch) is going to save money at the same time as promoting good health (especially when compared with lunching on a Big Mac with fries). On the other hand, it remains to be seen whether liquidity will save the world economy.

(The US government’s recently announced $600 billion QE2 programme, on a very rough calculation, could buy every person on the planet a lunch of wholesome pulse-based soup, for about 150 days.)