For all their gray hair and off-the-rack suits, the politicians of Westminster can be as herdlike in their behavior as a gaggle of Justin Bieber fans. Try to discuss policy with an MP and you’ll probably get back a string of two-word phrases. Raise the subject of economics and chances are you’ll hear the words “growth strategy.” A “growth strategy” is precisely what Prime Minister David Cameron doesn’t have, says the opposition—he’s just obsessed with making spending cuts. What he needs is (two-word-phrase alert) a "Plan B." Nonsense, retort ministers; the first priority is our (here comes another) “deficit reduction” plan. Party spin doctors compact serious ideological disagreements into lines bounced to MPs’ BlackBerrys and parroted in BBC discussions.

Laughable? Of course. But sad, too, because the Battle of Pithy Economic Euphemisms conflates two subjects of vital importance—and trivializes them both.

The first is obvious and immediate: how the British economy gets well again. Britain and the United States look somewhat similar at the moment: an anemic recovery, with unemployment high and the housing market still heading south. But the treatment prescribed by Britain’s ten-month-old center-right coalition is very different. However timid, and watered-down, and downright unsatisfactory his stimulus measures, Barack Obama is not by conviction a deficit hawk. In Downing Street, by contrast, they really do believe that Britain needs the economic policy equivalent of leeches. Cameron will soon begin the biggest cuts to public spending Britain has seen since World War II. Government departments will be slashed by 19 percent over the next four years, while half a million public sector jobs will be lost. This is bloodletting on so vast a scale it alarms even orthodox economists and business groups. By the government’s own projections, it will depress growth every year until 2013—even as the country struggles to emerge from its deepest and longest postwar recession.

Just as Victorian quacks used to do, Cameron acknowledges his treatment will be painful. But he claims it is necessary if Britain is not just to get out of recession but have a sustainable future. In making this argument, he is raising a second, longer-term question: how should the economy change? Ask a senior politician from left or right where Britain went wrong during its long boom of the past two decades and eventually his or her answer will boil down to this: the country went finance crazy. The economy and the government depended on revenues from the banking industry. And voters without high-rolling jobs in the City or Canary Wharf racked up massive debt and used their homes as speculative assets, to be bought and tarted up and sold on, sometimes within months.

After years of giddy excess, post-crash Britain is a chastened creature, its people full of solemn vows of sobriety. In Westminster the consensus is that the country needs fewer banks and more factories, or what one former cabinet minister summed up as “less financial engineering and a lot more real engineering.” There’s no reason why this perfectly sound long-term objective should be lumped in with the more pressing concern of ensuring that Britain doesn’t lapse into another painful recession. But that shallow Westminster debate, the noisy back-and-forth of policy bullet-points, has fused the two arguments while ensuring that neither gets a proper airing.

Cameron can certainly rhapsodize prettily about the need for an industrial renaissance. “The new jobs, the new products, the new ideas that will lift us up will be born in the factories,” the Conservative prime minister declared last autumn. But his problem is twofold: in the short term, his austerity program risks choking off exactly the growth that would help British businesses. And over the longer term, the coalition has few of the policies necessary to nurture new industries.

In the center-right government’s view of the world, all ministers need do is squeeze spending, hack the public sector and bingo! The private sector, in all its widget-making, iPhone app–creating dynamism, will come roaring in to fill the gap. If that sounds sketchy and unconvincing, it’s because it is. This sort of experiment was tried before, in the early 1980s—with disastrous results. And as far as manufacturing goes, the Westminster argument underestimates just how bombed out the sector is.

Britain remains one of the largest manufacturers in the world, but the days of huge assembly lines churning out goods stamped Made in Britain are over. The proportion of manufacturing companies with ten employees or fewer has shot up from 52 percent twenty years ago to 76 percent now, according to a report from the Centre for Research on Socio-Cultural Change (CRESC) at Manchester University. Meanwhile, businesses with 200-plus employees have dropped from 4 percent to just over 1 percent. British industry is an ocean full of minnows. Germany has its Mieles and Mercs perched atop vast supply chains of producers; in Britain we have a series of tiny workshops knocking out garden railings. The government can give these firms as much headroom as they like, but the actual businesses are too small, too amateur in matters of export and marketing, to fill the space.

If the government were serious about encouraging industry, it would do more than just sit back and cross its fingers. The CRESC team suggests giving tax breaks to manufacturers that do the bulk of their work and employ staff in Britain. But any solution should also take in the banking system. To anyone outside Wall Street and the City, the function of banks is really quite simple: they take savings and lend them out to productive enterprises. Right now, they are loath to make loans amid a slump. But nor did they do a good job during the bubble. By 2007 around 40 percent of all bank and building society lending was for property purchases; and nearly half of the rest of all credit went to financial intermediaries. Loans for socially useful, economically productive businesses? Forget about it. During the crash, the government all but nationalized two of the biggest banks. Ministers should require them to lend a certain portion of their capital to strategic industries—low-carbon technology, say—and underdeveloped regions. Does that sound radical? Well, the German government has long had KfW Bankengruppe, which directs credit to small businesses, while Japan has also begun strategic lending. True, tax breaks and credit regimes are trickier things to get your head around than airy talk of “rebalancing the economy” or a “growth strategy.” But it is only when ministers start to discuss Britain’s economic future in phrases more than two words long that we’ll know they’re serious.