Drowning in an ocean of debt

NB: The author is Tim Hewish, who I am glad to welcome as a contributor. — Steve

We are drowning in an ocean of debt. The video above may be an American example, but it serves us well when highlighting the dire straits the British economy is in under this Labour Government.

Government isn’t any different from the average person – in that it shouldn’t act in a fiscally irresponsible manner. If you or I were to go into debt, there would be pressure heaped on us to pay back that money and we certainly couldn’t print our own ‘new’ money and call it quits.

The current Government thinks it can get away with doing simply that. By piling up huge piles of debt and flooding the economy with printed money we don’t have (Quantitative Easing) we are perilously close to a debt deficit mirroring the Greek state, which is in a State of Emergency. Dan Hannan MEP also underlines the level of the problem:

Gordon Brown will borrow more in the next two years than in the whole history of our national debt, since it was instituted in 1693.

In short, a Government must live within its means.

Labour also need to understand that Governments don’t possess money themselves. What they do have is access to tax payers’ money now and in future, so when they decide to raise taxes it shouldn’t be to service their level of debt.

I am in full agreement with Policy Exchange’s report titled: Controlling Spending and Government Deficits, which examines how Britain might best rid itself of its astronomical debt. Andrew Lilico, Policy Exchange’s Chief Economist, says:

We found that a number of countries which cut their deficits benefited from lower long term interest rates and higher confidence, leading to faster growth as a result. However, it is important that most of the deficit reduction effort should come from spending cuts not tax rises. We found that countries which tried to fix their finances mostly with tax rises have tended to fail.

This is also closely allied to the idea that Britain needs to get back to being a nation of savers. As David Cameron has stated on a number of occasions we need a culture of personal responsibility and what better place to start than being economically and fiscally responsible in your everyday transactions.

This is something Labour does not grasp in public policy, take for example, the recent revelation about their secret plan for a 10% ‘death tax’, as Mark Wallace of the Taxpayers’ Alliance said:

It is totally unfair to punish people for doing the right thing and saving up all their lives, when they are taxed on earning and saving the money in the first place.

In effect what Labour is doing is encouraging a reckless spending culture. This does not teach responsibility and if a Government can’t take a lead and act responsibility then they are not fit to govern.

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