By the end of this year, the UK national debt may surpass ?1 trillion. The unprecedented concentration on such dire economic news in the past few years has spawned an epidemic of economic jargon in everyday speech. Suddenly, weird phrases appear on the street, drawn from the worlds of hedge funds, investment banks and international taxation agreements. They take on lives of their own. It seems that many things now can be "collateralised", not just "debt obligations". And whose body these days is anything less than "sub-prime"?

A recent headline suggested that the Conservatives were going to "ring-fence" dementia. As far as I can remember, the report actually talked about the desire of (then) Shadow minister Stephen O'Brien to preserve NHS spending on dementia care. But it alerted me to the fact that I did not actually know what a ring fence was - just as three years ago, I was ignorant of CDOs (collateralised debt obligations).

Somehow I had imagined that ring-fencing was about bull fighting or sheep farming, but the top hit on the web told me that it was a "protection-based transfer of assets from one destination to another, usually through the use of offshore accounting" (www. investopedia.com). And before you could blink, the article was off into tax evasion. This was a bit disturbing, as I know some really quite nice people who are wholeheartedly into ring-fencing.

They want to ring-fence defence spending, or foreign aid, or health expenditure, or schools, or pension entitlements, or research, or all of the above. "Annually managed expenditure" (last week's addition to everyman's popular phrase book of public expenditure) may be "effectively ring-fenced", while we now have the ungentlemanly counter-sport of "unring-fencing".

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We all now await 22 June when the new government promises an austerity budget that will attempt to rein in at least ?6 billion of expenditure. In ÖйúAƬ, we also await the determination of Lord Browne's review into ÖйúAƬ funding.

So, what will be ring-fenced? What will be left to graze unprotected on what is left of the commons? And what risks being "defunded" altogether?

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There seem to be three current debates about ring-fencing and their arguments often go like this.

Research funding from government needs to be ring-fenced to preserve renowned British excellence. In tough times, we protect quality. Unlike education - this argument proceeds - where there is still opportunity to shift more costs to the student-consumer (hence, Lord Browne), there is apparently little opportunity to shift research costs to industry.

A second battalion of ring-fencers wants to throw a protective cordon around the full-time domestic undergraduate, normally studying for the three-year honours degree. This is the gold standard of British ÖйúAƬ, seen at its best in the specialised study of the Oxbridge full-timer. In tough times, its quality and international uniqueness demand protection. Under this scenario, long-suffering part-time students and postgraduate taught students may just have to suffer a bit more.

An existing, and strengthening, argument says that in tough times student choice or research quality assessments do not necessarily work in the national interest. A more directed approach is needed. STEM - science, technology, engineering and mathematics - needs to be ring-fenced because it creates the wealth and new productive capacity that our ailing economy desperately needs. And who is left to graze outside the fence? The humanities, arts and social sciences (HASS), where a majority of students study and staff work.

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Each of these ring-fencing scenarios has big dangers, but unless all of ÖйúAƬ can be ring-fenced (which seems unlikely) something has to give.

To my mind, the weakest argument of all comes from those who want to ring-fence STEM. In fact, there is more assumption and assertion than worthy argument here. This stance does not pass the quality test (used to support the first two scenarios) by national or international comparisons. And this argument often fails the employability test of the real world, despite industry's frequent call to double the percentage of STEM graduates.

Most curious of all is a belief that knowledge can be effectively repackaged back into yesteryear's boxes. STEM, it seems, has rigour, relevance and "answers", while HASS is all unstructured chat and opinion. In short, STEM is somehow "hard", while HASS is "soft".

Rubbish. There is nothing soft about understanding the human condition. It remains our most enduring mystery.

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I was pleased to join half a dozen other vice-chancellors recently in arguing for the unring-fencing of STEM ("Don't ditch arts funding in favour of science. It's vital to our society", The Observer, 28 February 2010). Interestingly, this group was not arguing for the "counter" ring-fencing of HASS, but rather a more balanced playing field. We said: "People's complexity comes from their language, identities, histories, faiths and cultures. Without understanding that complexity, we cannot address the challenges" that face our nation and world.

What's more, these HASS subjects are vital to the creative economy, where Britain is still a stand-out winner.

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