The current political battle is over how soon we start to rein in the deficit. Labour says we must not do so too soon. Doing anything before the election is to them too soon. The Conservatives say start now and get on with it.
The government says ending the large deficit “early” would jeopardise the recovery. Yet their own figures shows that the UK has been the last out of recession and has the most feeble recovery of all despite receiving such a collosal “fiscal stimulus” and monetary boost. Indeed, over the last five years the government has nearly doubled the money supply, and doubled the national debt, only to achieve absolutely no growth in the UK economy. Who does believe on that evidence that their stimuli bring growth? The 1981 and the 1992 recessions ended when the government took action to cut the deficit.
If you look at what the public are doing, they believe the way to tackle excess debt is to pay some of it off. The private sector, families and businesses, were too deeply in debt in the boom. They are busily paying it off or reducing it at the moment. They do not think the best strategy is to go on borrowing more to “borrow themselves out of the crisis”. So why on earth does the government think it can defy gravity and borrow its way out of its own debt crisis? As Greece has shown in the last week, markets can extract a large price on any government that thinks it can get away with huge borrowings. First they make the debt very expensive, then they refuse to lend as much as the compulsive borrower wants.
Conservatives need to explain to people that when we are told the public debt is increasing and this is a good thing, that debt is our debt. As a French King once said “L’etat, c’est moi” . We have to remind our government that we are the public and the public debt is unfortunately ours. We are the state and we will be made to pay the interest and then repay the capital. They need to say that previous recessions only ended when the government stopped overspending and left some money for the rest of the economy to use.
Commonsense says when you are this deeply in debt you need to stop borrowing. It also tells you that the way to do that is to limit your spending. You can have too many five a day officers and Chief Executives of quangos. So bring on the economies before we all drown in a sea of debt.