Governments don’t really pay back debt. They just roll it over. Economic growth, can reduce the % of debt to GDP, making previous borrowings increasingly less significant. The UK has debt exceeding 100% of GDP in 81 of the last 170 years, there has never been a crunch time, when it suddenly all had to be paid back.
What tends to happen is this: we borrow, GDP increases, borrowings become a lower proportion of GDP than when first borrowed. Talking in absolutes – pounds instead of percentages – doesn’t do anything to throw light on the debate, because of this fact.
This, of course, is all predicated on economic growth. If that doesn’t happen, then the debt as a proportion of our GDP doesn’t reduce. This is why our debt is currently spiralling out of control – because we don’t have growth.
“In effect, the Government with their austerity policies are the architects of our current economic malaise.”
Growth requires investment. Cuts to government expenditure have a multiplier effect. So if you cut a pound from expenditure, you reduce GDP by between £1.20 and £1.60. This is a little simplistic, but it serves the purpose.
In effect, the Government with their austerity policies are the architects of our current economic malaise. The worrying thing is THEY KNOW THIS. So you can only assume that they are cutting for another reason. Conjecture about this is fruitless – there could be a million and one reasons for wanting to stop growth and place the burden on the working people of Britain. My own favourites are: (a) growth is, or soon will be no longer sustainable, so the government is preparing the way for an economic apocalypse, or (b) they are taking the opportunity of our recent crisis to entrench the pre-eminence of the “haves” at the expense of the “have nots”.
Either way, we’re paying and they’re not. That has to change, otherwise social unrest will become a highly visible, daily component of life in Britain. This is a dangerous and highly volatile time – the dam which filters working class aspiration is creaking and if it breaks in an uncontrolled manner, we could see all kinds of weird political results. People look for scapegoats when they are under pressure – it is natural to assume that you’re not to blame – and when an easy target is shown to you by a charismatic leader, quite often people buy into it and react accordingly.
I really fear for the future if the British people give in to the siren calls of prejudice, because in truth, we really are “all in it together” (the elite excepted) and together we must stand. Don’t be fooled by the side shows of Europe, so-called Muslim terrorism, greedy Trade Unions, corrupt politicians that are “all the same”, work-shy disabled and lazy benefit claimants.
These are diversions.
They’re grabbing your attention, diverting your eyes from the real culprits: the rich and their unending war on those of us who make everything, build everything, and create everything. Never has there been a time in my life when the old Trade Union adage of “Together we stand and divided we fall” been more true. It really, really is us versus them now.