This month's credit card bill has just crashed onto the doormat. In fact it's so big and heavy it crashed straight through the floor.MONDAY, OCTOBER 20, 2008
Cut Up The Credit Card
Still racking up
Worse, this takes no account of the downward economic lurch now in prospect, let alone all those Keynesian splurges everyone's now talking about. In technical fiscal parlance, we are totally, hog-whimperly, stuffed.
Of course, government ministers are scuttling round saying it's not a problem because they've cut our debt so much since 1997 - Lord Mandy repeated the formula yesterday. But that's not at all what the official ONS statistics say.
The official measure of our National Debt (the measure Gordo always used to bang on about in his bragging days) is called Net Debt as a % GDP (ONS series codeRUTO). It currently stands at 43.4%, and here's the long-term chart:
Well OK. During the longest boom this country had seen since 1379 (as Gordo kept bragging), they did manage to get borrowing down. The low point was 29.7% of GDP in 2002 Q1. But that was reached only after 8 years of 3% pa growth, and compared poorly with the 26% achieved by the Tories just before the early 90s recession.
For all the use they've been, we might just as well have left our credit cards in the hands... well... the beaks of ostriches. They also ignored Alvin's advice to cut up their credit cards and look how that ended:
Monday, 20 October 2008
When Labour came to power in 1997 Q2, net debt stood at 42.9% of GDP - lowerthan today's 43.4%. So they haven't cut our debt at all.
The truth is they chose to ignore the possibility - no, the certainty - that one day we'd hit another recession and would need to crank up borrowing to get us through.
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