Deficit Deniers
We hear less about these people now. Ireland has made them wonder. They will be back if the economy slows significantly as the cuts bite next year. The issue, however is not the deficit. It is the level of national debt. This is what has brought Ireland down, brought Greece to its knees, threatens Spain and Portugal, possibly Italy and could then come our way too.
The budget deficit is a detail. It is an important detail because it causes the debt to grow bigger every day. The debt must stop growing. Already it is too big for one generation to cope with. The markets wonder whether these debts are repayable at all. The scenario is like a bus full of people whizzing along a road which ends in a cliff. The argument rages within the vehicle at what speed the bus should go. The fact is all are doomed unless it stops.
In the UK we have world leading combinations of personal and national debt. We have to rebuild our economy on a totally different model which avoids at all costs borrowing more money and uses every opportunity to pay it back. Any economist who says borrowing is the only forward is going over the cliff in the bus. However renowned they are.