Both major political parties have dropped a key target that would see the national debt falling over time.
The move will allow tens or even hundreds of billions more in investment spending on hospitals, schools, housing and public transport.
Shadow chancellor John McDonnell said Labour would change the way public spending is accounted for, freeing it up to spend.
Chancellor Sajid Javid also plans to relax his debt rules and spend more.
He said his new rule would allow 3% of GDP in investment on public infrastructure projects - potentially an additional £100bn over current plans.
This would allow the party to spend more on hospitals, schools, roads, railways and broadband, he said.
Mr Javid said he still expected the debt to be lower at the end of the next parliament, but this was not a hard-and-fast stricture.
Like Labour, he also channelled some of the same arguments about taking advantage of cheap borrowing.
Labour's plan is a major revolution in fiscal targeting, designed to allow hundreds of billions in extra investment spending to grow public sector assets.
Mr McDonnell described the new approach as targeting "public sector net worth", saying that it was akin to how companies report their balance sheets. It also builds on a new set of figures that the Office for National Statistics has started to report regularly.
It means there will be little incentive to use off-balance sheet mechanisms, such as the much-criticised Private Finance Initiative.
But it also means a much more generous treatment for Labour's plan to nationalise some privately owned utilities, because the funding required will be offset by the acquisition of the asset - the company.
It is radical too. It relies on the continuation of the current very low borrowing rates offered to governments around the world.
And while there is an emerging international consensus on taking advantage of these cheap rates to boost growth, at a time when central banks are running out of ammunition, there is a limit.
There is a new post-austerity consensus on spending more for the future.
The dividing line is whether it is tens of billions required or hundreds of billions. And who voters trust to spend it well.