Don't Mention the Debt

The Chancellor may have thought he had got away with it, at Conference, in an unusually candid assessment of the progress against the deficit reduction target.

The larger than life Senator for New Jersey, Chris Christie, is quoted as saying:

“Our founding fathers had the wisdom to know that social acceptance and popularity is fleeting and that this country’s principles needed to be rooted in strengths greater than the passions and emotions of the times.  Our leaders today have decided it is more important to be popular, to do what is easy and say ‘yes’ rather than ‘no’ when ‘no’ is what is required.”

The deficit, the difference between what we currently spend and currently earn, may well be a popular thing to talk about because achieving a reduction in the deficit is, at least, achievable, sometime in the future.  However, the low hanging fruit has been picked and the Chancellor, rightly, warned of tougher times ahead. I think he should have told us more.

The elephant in the room is the debt.  As I understand it, the National Debt has ballooned by 80% since 2010 to a whopping £1451 billion (and rising rapidly, despite deficit reduction austerity measures). According to Liam Halligan, writing in the Sunday Telegraph yesterday, the cost of servicing this mountain of debt will soon exceed the annual education budget.

Now, I find it strange that a political party that once cared so much for the planet and the legacy of global warming, that it promised to be the “greenest government” ever, should now hold back on an even greater threat to our children. In terms of morality, what is the difference between bequeathing an impossible legacy of debt, a maxed out credit card, or environmental catastrophe resulting from (alleged) global warming?  If ever there was something greater than the “passion and emotion of the times,” it is the problem of the National Debt.

Yet, with a few honourable exceptions, eg Carswell, our politicians say nothing, presumably in the forlorn hope that "something will turn up." That will just not do!  Quite apart from the overwhelming moral case that we should not inflict the debts of our excesses on our children what happens, in the meantime, if our creditors decide to pull the plug?

Can we afford to wait another 5 years, racking up debt at such an unsustainable rate?  Apart from the helping hand of inflation, the National Debt is not going to go away by itself. We are going to have to pay off the credit card accrued balance, not just the minimum monthly payment.  This means reversing the current account deficit more quickly, either by cutting expenditure or increasing revenue, or both.  With the fruits of admirable growth in GDP not being reflected in tax receipts, the impact of an increase in taxation being self-defeating, it is surely time to say 'no' to unaffordable spending?   Now that should stir the passions and emotions of the times!