Taken from todays Times of London:

“Gordon Brown is absolutely right to argue that the Government should borrow more or less without limit as long as economic growth remains very weak and private businesses and homeowners are repaying more credit than they take out.”

Anatole Kaletsky, The Times, 27th January 2010

How was this man ever the Times’ economic editor?

Let me put this is layman’s terms.  If Britain continues to borrow, the odds of us defaulting increase.  If the odds of us defaulting increase, the ratings agencies (S&P’s, Moodies and Fitch) will downgrade us.  When they downgrade us, the interest on our bonds (thus our debt) increases.  To pay that extra debt means extra taxes or greater cuts in public services.  Doing the former means slowing growth, which hits us all.  Doing the latter is unfeasable under Brown because his already broke party is kept afloat by payments from public sector unions.  And if Cameron gets in, he’ll probably be too spineless to cull as many jobs as is necessary, so we’ll still be stuck with the tax raises.

Borrowing just passes on the cost to the future.  We the British public know this, which is why we are reducing our own private debts (finally).  Why can’t idiots like Kaletsky understand this?

There aint no such thing as a free lunch.


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