Walking the line
It was never going to be easy. In his Pre-Budget Report the Chancellor had to boost his government's standing with the electorate - without lowering it with international investors.
The result was a speech which seemed to do a lot of things - but left the broad picture for the public finances remarkably unchanged. And remarkably bleak, even if the structural hole in Britain's budget is now slightly smaller than the Treasury thought.
For all the rhetoric about supporting the recovery, the Chancellor is not planning to spend much more next year than he was at the time of the budget (see my earlier PBR blogs).
But he is spending more than previously forecast in both 2011 and 2012 - in total, nearly £15bn more. And he's using rosier deficit forecasts, and higher taxes on everyone earning more than £20,000 a year, to pay for that "protection" for frontline services.
Liam Byrne, the Chief Secretary to the Treasury, told Newsnight that 60% of the new taxes being raised would be paid by the top 5% of earners. Number Ten says that half of the revenues raised by the Chancellor since last year's Pre Budget Report have fallen on the top 2%.
You get the idea. But the National Insurance rise will not only be felt by the rich.
The question will be whether voters buy the idea that it's needed to protect those "core" public services, even though the 'protection' only lasts 2 years (2011 and 2012), whereas the new tax revenues will run and run. As will the tight plans for the rest of public spending.
For their part, investors - and rating agencies - will look at the report and see a chancellor who is broadly meeting his deficit and borrowing forecasts. But they will also see a chancellor who is not using an improvement in the underlying position (that roughly 1 per cent of GDP fall in structural borrowing I discussed in early posts) to cut borrowing faster than before.
In fact, debt as a share of GDP is going to start falling one year later than before, though by recent standards the slippage is pretty small.
Alistair Darling is also planning to raise taxes, and increase spending, in years when the Treasury is expecting economic growth of 3.5%.
Come 2011, if the economy does look fairly strong, in the real world investors would be looking for the Chancellor - any Chancellor - to take advantage of that growth to speed the effort to cut borrowing.
He (I think we can assume it will be a he) might be punished in the bond markets if he failed to take that opportunity and stuck to these plans. In other words, the long-term cost of servicing the debt might well go up, as would borrowing costs for UK companies.
But investors and ratings agencies know that we are not living in the real world right now. We're living in a world in the lead-up to a general election.
So far, they seem willing to wait to hear from the winners of that election before making a definitive judgment about the UK.
The Conservatives would rather the markets were less patient. If investors started openly to question Britain's credibility as a borrower, George Osborne might have more chance of persuading voters of the need to be more hard-nosed about the budget than Alistair Darling was this week.
But it's not as if the path sketched out by the Chancellor was all sweetness and light.
In the end, the PBR tells us what we already knew: there really are no easy ways out from here.
Alistair Darling found that fine line to walk between the demands of the city, and those of his party. But he won't have left either of them very happy. Such are the options for a country borrowing more than 12 per cent of national income this year - and next.