‘At the Tory conference, men whose careers were lost down the political U-bend just two years ago were the star turns. They now sit around the cabinet table and make the running in our politics.’ Photograph: Barcroft

For the most acute comment on the outlook for Brexit Britain, look neither to bankers nor economists – but to the British Museum’s former director. Speaking in Germany last week, Neil MacGregor described his compatriots’ habit of swaddling themselves in their past as if it were a blanket.

“In Britain we use our history in order to comfort us: to make us feel stronger, to remind ourselves that we were always, deep down, good people,” he said. “Maybe we mention a little bit of slave trade here and there, a few wars here and there, but the chapters we insist on are the sunny ones.” Then came the warning: “This sort of handling of history is dangerous as well as regrettable.”

It seems to me that MacGregor’s comments cut straight to the heart of what is most dangerous in Brexit Britain. What he’s describing is delusional thinking: the red-faced insistence on one’s beliefs despite the mountains of evidence that prove them wrong. Delusional thinking helped tip Britain out of the European Union: the promise of those sunlit uplands of £350m weekly cashback and thousands of trading opportunities. Three months later – even after all the warnings from the European leaders soon to be suing us for alimony, the anxiety from business associations and the repeated broadsides from financial markets – delusional thinking remains rife.

Take the helium-filled unreality of the Conservative party conference in Birmingham. There, the top draws were the Brexiteers, Liam Fox and David Davis. Men whose careers were lost down the political U-bend just two years ago were now the star turns.

At one packed fringe event I heard the MEP Daniel Hannan sketch out Britain’s glorious future (“We can trade with Kenya!”), drawing primarily on the 18th-century economist David Hume. Elsewhere, a colleague saw a businesswoman raise with David Davis her worries about foreign trade. The response from the new Brexit secretary was to cite the example of the Congress of Vienna, the diplomatic carve-up of the continent that concluded in 1815.

Then there was foreign secretary Boris Johnson describing his new offices: “When I go into the Map Room of Palmerston I cannot help remembering that this country over the last two centuries has directed the invasion or conquest of 178 countries.” Ah, the good old days, last seen in Rhodesia! How the conference hall loved that.

Were this just the froth of diehard Brexiteers at an otherwise placid time, we’d move on faster than you could say “Bill Cash”. But these men now sit around the cabinet table and make the running in our politics. They and their allies look to have secured a hard Brexit, ensuring Britain will leave the single market entirely by 2019. And if Theresa May won’t offer a “running commentary” on Britain’s departure, you can bet they will.

But even outside the ideological hothouse, both political and media classes are peddling wild over-estimations of the British economy’s strengths, and complete fantasies about its future. Such narratives begin by depicting a manufacturing renaissance, progress to the rebalancing of a lopsided nation, and end by looking forward to a Brexit boom.

While I understand the need for optimism in turbulent times, there are three big problems with these stories. They are spun by the same people who never saw Brexit coming, largely because their travelcards didn’t take them far enough outside central London and its honeyed hinterlands. They suffer from the same delusional thinking as outlined by MacGregor, in which the bad in Britain’s economy and democracy – of which there’s a lot – is considered too rude to bring up.

So let’s have some ugly facts. First of all, the crash in the pound is a reminder of one overriding danger that some of us have been warning about for years: Britain does not pay its way in the world. It buys far more goods and services from other countries than it sells to them.

That deficit is made up entirely by what Mark Carney, governor of the Bank of England, has called “the kindness of strangers”. Which is fine, for as long as those foreign strangers consider London a safe haven for their cash. That shouldn’t be taken for granted now that Britain is about to take a giant political and economic leap into the dark – and sterling has already plunged further this year than the Argentinian peso. Remember, Whitehall is only beginning to think seriously about the mechanics of leaving the EU: years of this mayhem are still to come.

Ah, we’re told: but all this currency weakness is just brilliant for British exporters. It makes their goods so much cheaper to sell abroad. True, but that is to overestimate the bag of bones that is the British manufacturing sector 30 years after the Thatcher revolution.

Germany has its BMWs and Boschs, its Mercedes and Mieles. Britain? GEC, ICI and the rest were all broken up and sold off years ago. That leaves Rolls-Royce as the only large, world-class, hi-tech company making a complex finished product in this country.

Other manufacturers still work in Britain – but typically they assemble components made elsewhere. That is true of our car industry, and it is true of JCB, the company David Cameron used to love touting in India and China. In 1979, 96% of a JCB digger was made here. By 2010, that had dropped to 36%.

Norway used its oil money to build the world’s largest sovereign wealth fund, now worth $882bn (£713bn). Britain spent its money on tax cuts. From trains to energy, many of its utilities have been successfully renationalised – except that the owners are now other countries.

What the pound’s weakness will chiefly achieve is to stop Britons buying as much. The middle classes will swap the wonders of the Alhambra for a week in Anglesey. The working classes will find Zara 15% more expensive. The resulting rise in inflation will really hurt those relying on benefits, such as child and working tax credits and jobseekers’ allowance, frozen by George Osborne.

According to calculations by the Resolution Foundation, a couple with two children in which the husband works full-time and the wife works part-time on or just above minimum wage stand to lose a total of £720 a year by 2020. Half of that is lower wages, the other half will be benefit cuts.

Think about those figures: a Britain that doesn’t make things, that can’t pay its way in the world and where two generations have been brought up believing that what your wages won’t pay, your credit will buy. As the promises for Brexit are broken and people get poorer; as the consumerist model breaks down, who do you think will pay the price?

The answer, I’d suggest, was on show in Birmingham last week. Without Brussels, the right still has one set of scapegoats left. They number the Muslim woman in the headscarf, the Pole in the wrong kebab shop, and the African cleaner on the nightbus.