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Friday, August 16, 2013

A recipe for national bankruptcy

No matter how many times a policy of profligacy leads to disaster - be it through debasement of the currency, allowing the money supply to get out of control, house price or stock market bubbles or building up vast amounts of government debt - there are some people who refuse to get the message that governments cannot magic up infinate resources without consequences.

These people are always guaranteed to blame the person or government who clears up the mess for the pain involved, not the person or government on whose watch the problem was created.

Hat tip to Political Betting where a number of posters such as Richard Nabavi and others pointed out that this article in the Guardian is an excellent example of such a mindset.

Lots of weeping and wailing about how dreadful the cuts are and how Miliband ought to do more to oppose them.

Without the least scintilla of recognition that when an incoming government inherits a situation where it is spending four pounds for every three coming in and that the national debt has just doubled to 1.2 trillion pounds, such a position is completely unsustainable and there really is no alternative to cuts, tax increases, or some combination of both.

The nearest things to constructive suggestions to deal with Britain's fiscal and debt problems in the entire article are the references to a campaign (with which the author of the article is associated) that the government should make it more difficult for people to employ both legal and illegal means of getting out of paying tax (avoidance and evasion). As this is about the one thing that the government, opposition and press all agree on it doesn't get us very far.

While I would be the first to admit that we cannot afford complacency, Britain is showing the first signs of recovery, though things are still extremely difficult for many businesses and familes.

But if attempts to keep spending under control were abandoned and borrowing allowed to increase, it would not take too long at all before this country was in the same kind of mess as Greece or Cyprus.

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