The hidden debt is the real monster

Written by | Saturday 12 June 2010

Yes, the government is deep in debt. But how deep? The Treasury says about £893 billion, equivalent to 62% of GDP, the amount we earn each year. Even with the promised cuts it will reach 75% of GDP in five years’ time.

That isn’t the half of it; not even a quarter of it. The government owes five or six times more than it lets on. Like the iceberg, its IOUs to lenders are just the part you can see. Far bigger are all those IOUs it has given us on our future pensions and medical bills — promises that keep growing as the population ages.

A scalpel is needed on health costs we can no longer afford

Written by | Saturday 12 June 2010

Cutting public spending is the most pressing challenge the Government faces. Right now, we have the biggest budget deficit in the developed world and are accumulating debt fast. Put simply, the British government is borrowing about £18m per hour, every hour, all year long. But we can't go on like this indefinitely. And the slower the political response to our fiscal crisis is, the more likely a Greek-style meltdown becomes.

When Will the Eurozone Collapse?

Written by | Thursday 27 May 2010

As a long-standing critic of the concept of a single European currency, I have not rejoiced at the current problems in the eurozone that threaten the very survival of the euro. Before discussing the events surrounding the Greek debt crisis further, I must provide at least a working definition of what the word "collapse" means. In the context of the euro, there are at least two interpretations that come to mind.

A law to stop the splurge

Written by | Sunday 16 May 2010

Our new prime minister and his deputy agree: our government has been spending and borrowing too much. Good, as Alcoholics Anonymous might say — admitting your problem is the first step towards dealing with it.

The new Treasury team might actually manage to re-cork the bottle. George Osborne, the chancellor, is blunt about wanting to balance the budget and David Laws, his Liberal Democrat deputy, is also known to be a hawk on economic matters. It bodes well, too, that Iain Duncan Smith, who knows how to get people off welfare and into work, is now installed at work and pensions.

Reflections on the coalition agreement

Written by | Wednesday 12 May 2010

An emergency budget will be held within 50 days, and will announce £6bn of cuts in the current financial year, and outline a deliverable long-term plan for “significantly accelerated reduction in the structural deficit”, mainly through spending cuts. A full spending review will be initiated, and will report in the autumn. Full strategic and defence reviews will be held at the same time.

US financial reform: two key mistakes

Written by | Tuesday 4 May 2010

Introduction