‘Fainting by numbers‘ finds all sorts of tricks for making the debt look truly dreadful. Well, it is: but not because it is so much per second, per person, or whatever. It is dreadful because its cause – a collapse in nominal GDP for the first time in 70 years, the destruction of a property/asset bubble upon which our Prudent Prime Minister had addicted the Exchequer – is damned difficult to fix. Vince’s paper (see previous post) is the best attempt so far. He points out best how it is the deficit not the debt that is really worrying.
But in terms of the future debt interest burden – which is what all this comes down to – we are not in any more difficulty than Mrs T was in 1982. See ‘A balancing act‘. Worst of all is Matthew Parris’s contribution, absurdly ignoring the economic truths of the past, ooh, 70 years to assert that Osborne was right last year to say that with real interest rates at 1, and aggregate demand imploding, paying the money back was more important than refloating the economy. Mad, dangerous, terrible economics.
I’ve written a letter to the Times: if it gets posted, you’ll get a link – otherwise, the text will be here.