What do you do on the eve of a general election, when your predecessor as Chancellor of the Exchequer (now Prime Minister) used most of the last 13 years of economic prosperity to grow the size of the state from 39% of GDP in 1997 to over 46% today?
When public debt, at 43% of GDP when this government was first elected in 1997, is now forecast to be 72% this year, and some say when including state sector pension and Public Finance Initiative liabilities is over 100% of GDP?
You do next to sweet bloody nothing.
You keep middle and upper class welfare, like the "Winter Fuel Allowance" which is a subsidy to home gas and electricity prices for everyone over 60 over winter. Yes David Bowie, Paul McCartney and Mohamed al-Fayed can all get this one.
You set up a couple of new financial/planning bureaucracies to "invest" in the economy.
You hike up some taxes, cut the fringes of a few others, and keep propping up the property market (can't let prices drop to market levels to let more people afford to buy can you?).
You optimistically forecast that you'll halve the deficit in five years, which simply means you'll keep borrowing from future taxpayers a bit less each year.
You announce proudly that you're borrowing, on behalf of every British household, ANOTHER £8,000 each. That is on top of the current public debt per household of around £50,000.
When public debt, at 43% of GDP when this government was first elected in 1997, is now forecast to be 72% this year, and some say when including state sector pension and Public Finance Initiative liabilities is over 100% of GDP?
You do next to sweet bloody nothing.
You keep middle and upper class welfare, like the "Winter Fuel Allowance" which is a subsidy to home gas and electricity prices for everyone over 60 over winter. Yes David Bowie, Paul McCartney and Mohamed al-Fayed can all get this one.
You set up a couple of new financial/planning bureaucracies to "invest" in the economy.
You hike up some taxes, cut the fringes of a few others, and keep propping up the property market (can't let prices drop to market levels to let more people afford to buy can you?).
You optimistically forecast that you'll halve the deficit in five years, which simply means you'll keep borrowing from future taxpayers a bit less each year.
You announce proudly that you're borrowing, on behalf of every British household, ANOTHER £8,000 each. That is on top of the current public debt per household of around £50,000.
You DON'T announce big cuts in spending in welfare, health, education, nanny state bureaucracies, corporate welfare and the like.
You leave that to the next government, which is more likely than not going to NOT include Labour.
Then, no doubt, you'll moan and point fingers at the cruel heartless new Conservative (maybe Conservative/Liberal Democrat) government for all of the spending cuts it imposes, saying how mean they are for NOT wanting to hike up the debt of future generations of taxpayers.
Meanwhile, the 30% plus of the public dependent on taxpayers for their jobs or incomes will dutifully march to give you a tick at the next election, because you now cater for them - because if they weren't so dependent, they might just be less interested in voting for you.
The first bid in the advance auction of stolen goods has been made, and it's pretty much "keep spending and let your kids worry about Greek levels of debt per capita".
Of course one difference with Greece (the most important one is that the UK government isn't lying about the figures, generally speaking), is the pound is responsive to all of this - given UK public sector borrowing is effectively printing money (by issuing bonds).
The Pound has fallen to a two week low against the US Dollar.
You see, one of the tactics (with little concern for the effect) is to simply steal from holders of Sterling in the form of devaluing their cash savings by borrowing more.
Now it's time to call an election, shame the alternatives are as inspirational as a puddle in a tunnel.
2 comments:
It's even worse in the US than what you have said.
According to this report in the Washington Times the US debt will rise to 90% of GDP.
How can we sustain that and still run as a government? The quick answer is we can't.
" President Obama’s fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation’s economic output by 2020, the Congressional Budget Office reported Thursday.
In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president’s budget would generate a combined $9.75 trillion in deficits over the next decade."
And this: "The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO’s deficit estimates."
Then this: "For countries with debt-to-GDP ratios “above 90 percent, median growth rates fall by 1 percent, and average growth falls considerably more,” according to a recent research paper by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland."
In short, we are witnessing the fall of the United States of America.
I guess I should have posted this to the second post down, but you get the picture, as dismal as it is.
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