For years, Keynesian have complained that governments must not treat the public finances as if they were household finances. This complaint lets the government off too lightly, because no sensible household would manage its finances in the way the government does.

Take three recent examples.

First, Osborne promised yesterday to sell the government's stake in Royal Mail to reduce government debt.

This makes no sense. The expected return on that stake should be positive, simply because if the market is valuing Royal Mail fairly its returns should be more or less those of the stock market generally. However, the government is borrowing at a negative real interest rate. Selling a positive-returning asset to pay off costless debt is just daft. It's like a tradesman selling his van and tools to reduce a mortgage whose payments he can easily afford. Nobody would so that.

Of course, selling the stake might make sense if you thought Royal Mail were overvalued or if you expect borrowing costs to rise sharply. But the market does not expect the latter. And the fact that the government sold Royal Mail so cheaply in the first place suggests it has no especial knowledge about its value.

Secondly, Radio 4's PM show has this week been running a series about NICE. This has reminded me of the government's very partial attitude to cost-benefit analysis.

If we take the NHS's drugs budget as fixed, it is entirely reasonable to use CBA to maximize its effectiveness: it's suboptimal to spend £10,000 to give someone a few weeks of impaired life when it could instead give somebody else many years of healthy life.

But how is the drugs budget - and the NHS budget - set? It's not by careful CBA of the sort conducted by NICE but rather by politics and inter-departmental higgling. £10,000 to give someone an extra month of life might not sound a good deal when compared to £10,000 spent on a more effective drug. But what if the comparison is with MPs' salaries, spending on failed IT projects or handouts to Capita?

Applying CBA to only a pre-set portion of public spending is penny-wise, pound foolish. No sensible household would make best use of its food budget, whilst allocating cash between food and other things according to no good principle.

My third example is the most egregious. It's the commitment - shared by David Cameron and Liz Kendall - to spend 2% of GDP on defence.

To see how silly this is, imagine you wanted your family to eat more healthily. So you "commit" to spending 5% of your weekly household budget on fresh fruit and vegetables. You then spend £20 on a single carrot, and as you feast on this, you celebrate meeting your commitment.

This, of course, is bonkers. You've paid no heed to value for money. No sensible household would do this. The same should be true for defence spending: what matters is having adequate military forces and value for money for what we do spend. It's what we get that matters, not what we spend. Given that defence procurement has often been massively wasteful, this distinction matters.

I'm not saying here that households are rational maximizers. It's just that they are not the gibbering idiots that they would be if they managed their finances like the government manages its.