Every parent’s dream is to have a healthy baby and for that baby to have a long and successful life.

The shocking truth to Britain’s debt crisis is that this baby will be 23 before we are out of this current debt mountain.  Take a deep breath and really think about that.   The Institute of Fiscal Studies, (IFS), states that ‘debt freedom day’, the day when national debt returns to sustainable levels, will not be reached until 2032.  That is truly astonishing. 

Up until that point, families will face years of tax rises to pay for the Government’s record borrowing.  Hence why the Tories must push home with their campaign highlighting the debt burden:  (shown in the Sun launching their recent poster campaign):

Government debt, according to Government budget estimates—always should be viewed sceptically from ‘Alastair in Wonderland’,  will reach £1.4 trillion, equal to almost 80 per cent of GDP.  That is just jaw dropping.  Putting that in perspective, the interest on that debt is estimated at £58 billion a year, which is more than annual spending on Schools in the UK. 

If grave robber Brown had his way, this debt would be far far more.  The brakes were thankfully put on him by his governor of the Bank of England, Mervin King, who firmly told him that the UK has NO MORE MONEY. 

Interestingly, what was Brown’s first response to the recession?  To cut VAT to get people spending.  What effect did it have?  None.  Prices were falling in retail shops like a stone anyway, the Government lost tax revenue and helped reduce exchequer receipts.  Obvious that this was not working, Brown fell into the old Keynesian drug of trying to spend his way out of recession, propping up Banks, (the very ones he removed regulatory frameworks to prevent crashes), then spending on public works projects.  Brown does not get that the key to the recession is confidence.  People will start to spend again when they feel secure and happy to do so and they feel the recession has reached rock bottom.

People will not buy a new tv today if they can buy it next month for £100 cheaper.  People will not buy a washing machine today, if next month it is cheaper and have a 5 years free guarantee and service history.  People will not buy a new car, because the moment they drive off the forecourt, value is decimated before the inevitable price drop in another month.  But of course, Darling thinks we will now rush to buy a car with the bribe of £2k for our old car.  No Alastair, I will wait a few months for car prices to fall even more, then I will use your bribe.  Genius.

What’s the answer?  Well for one, hard decisions need to be taken TODAY.  This includes spending cuts, hard public sector pay agreements, (yes people in the public sector, you are blessed to be protected from recessions, in the real world ie private sector companies, a lot of us are suffering job losses, pay freezes, cuts in hours, 3 day weeks, pay cuts, whilst you obviously live in another world, wanting inflation busting pay rises and job security).

Drastic times call for bold decisions.  It’s time for change.