And his plans foresee current public spending being equivalent to 38.4 per cent of GDP in 2014-15 - a higher proportion than it was in the first 10 years of the Labour government (though a lower proportion than under most of Lady Thatcher's premiership).
However, almost all the growth will come in just four areas: health, education, international development and welfare (where spending is expected to rise 8.1 per cent to £171.4bn by 2014-15.) This means current spending will rise just 0.1 per cent a year in the other departments.
And because the costs of public services tend to rise even faster than prices generally, this implies huge real cuts. Which is why the Office for Budget Responsibility expects general government employment to fall by 490,000 (8.9 per cent) between 2010-11 and 2014-15.
The big question, of course, is: can the economy withstand such cuts? The OBR thinks so. It expects the private sector to create over 1.5 million jobs by 2015. This is because the natural recovery from recession creates more jobs than will be destroyed by the knock-on effect of public sector cuts: those 490,000 workers are 490,000 consumers whose spending power will fall.
There are, however, four reasons to doubt this optimism:
1. It not clear which element of private spending can grow quickly. There are reasons to be pessimistic about consumer spending, capital spending and net exports.
2. Although there are some cases of spending cuts leading to fast growth in the past, these are exceptions not the norm. And they occurred in nations where interest rates fell and trading partners were growing nicely - two benefits the UK is unlikely to have. A recent study by IMF economists concluded that "fiscal consolidation typically reduces output and raises unemployment in the short term" - though it did add that spending cuts are less damaging than tax rises.
3. It's widely thought that the multiplier effects of public sector capital spending are larger than others. This is a problem because the cuts here will be severe; public sector gross investment will by by 14.8 per cent (0.6 per cent of GDP) in 2011-12 alone.
4. If the cuts do imperil growth, there might be little that monetary policy can do to help, given that the effectiveness of quantitative easing is doubtful.
Of course, the danger of a weak economy is the risk that Mr Osborne is taking in order to avoid the risk of a Greek-style debt crisis. But it's impossible to say how significant this danger is. Mr Osborne is taking the large risk of a nasty outcome in exchange for the unquantifiable risk of a very nasty outcome.
It's tempting to say that we'll find out if he's right to do so. But we won't. We'll never see an alternative history with gentler spending cuts.
Instead, perhaps the strongest argument for Mr Osborne's policy is that, as he said, "There is nothing fair about running huge budget deficits, and burdening future generations with the debts we ourselves are not prepared to pay." However, philosophical arguments about the moral status of future people rarely loom large in political debates, and (almost) never affect asset prices.
