An ominous universal precept perhaps, but as far as the UK is concerned, the Shadow Chancellor, George Osborne’s City lecture this week has effectively consigned this year’s budget, not unfittingly, to the slops bin – a remarkable achievement, lest we forget that he’s a greenhorn. In fact I’d be less worried if he were Donald Duck.
In his article, Edmund Conway makes reference to history being our guide.
Admittedly, any reference to history these days immediately conjures a red rag for me, to the point where I now wonder whether Gordon Robespierre Brown may have taken several leaves from its annals during his own more-prolonged Reign of Terror as Chancellor, when he tried to spend his way to popularity in an obsessively vain attempt to disrobe Tony Blair.
The protracted Keynesian tactics employed at the hand of Gord in reaction to the sub-prime crisis have only served to exacerbate long-term fiscal damage, and worse, in a gargantuan effort since March last year to stimulate the economy, the extent to which the UK has printed money is truly awesome. Having tripled the size of its monetary base, more than 99% of the nice new crispy stuff has subsequently been deployed to buy the UK’s sovereign debt, thus enabling Mr Brown and his acolytes to feed their addiction to obfuscation and procrastination, in a spending frenzy concocted to assist them in their bid to prevail at the polls and hang on to their ill-gotten jobs. And so we’re presently on a life support system fuelled by a precarious form of circular financing that is inevitably destined for a very sticky ending.
The facts are glaringly obvious – apart from boasting the G20’s biggest deficit, the UK’s rate of debt accumulation is steeper than that of any other developed country, and unless we can convince our creditors of our seriousness of intent, the world’s bond markets may soon refuse to buy any more UK sovereign instruments, rendering it ultimately impossible for the world’s (currently) fifth largest economy to roll over its debts.
Far better that heads should have rolled long before now.
“The government in this revolution is the despotism of tyranny against liberty.”
Apologies to Robespierre.