Stating the obvious? So why is the reality so different?
Like Greece, Portugal is terribly indebted. Not because dirt-poor Senora Tristeza who sells in the local market decided to vastly overborrow more than she could pay, but because her government did.
Likewise, I did not ask the Labour government of Britain to borrow vastly over our repayment possibilities so that my son will be in hock for decades to come.
What is this absolute rubbish about “the borrowing requirement”? The British Chancellor comes out with this glib statement every budget day as if there was some cosmic compulsion that there should be a “borrowing requirement”.
NO, there shouldn’t …. Nobody FORCES us to borrow money, except perhaps in wartime. No government, and especially the current one, EVER says “No, we can’t afford that, we haven’t got the money and NO, we’re not going to borrow it.”
They just up the “borrowing requirement” automatically to pay for all their pet schemes and shibboleths. It is NOT a “requirement”.
It is a giving way to cowardice and greed, taking the easy way out. It is trying to impress people by the clever way they spend our money. They “require” to borrow because they do not have to courage to say (particularly near to elections): “Sorry people – we just can’t afford X, Y or Z as the money just isn’t there. We must be patient and live within our means.”
But it is time everyone started living within their means.
Individuals have a hard time sometimes, especially those desperate to get a foot on the housing ladder or parents desperate to get their kid into a good school, but the government does not have these excuses. There is NO excuse for building up vast debt. You have to live within your means.
This is so stunningly-obvious I wonder why it has to be said, but vast borrowing has become so endemic people think it is normal. And the levels of borrowing involved here are absurd. What sort of endictment is it of capitalism that several European countries (on the richest continent on the planet!!) are in great danger of going bankrupt?
Or, to put it another way, of defaulting on the debts that they cannot afford to repay? And even if they CAN pay they are also paying staggering amounts of interest, all money down the drain to fat bankers somewhere …..
Borrow to build a new railway because you’ll get the benefits back in emissions and efficiency savings. OK.
But borrow to pay civil-service bonuses and index-linked public (but not private!!) pensions and £60 billion on unelected quangoes and you will never get the money back. Someone will have to earn it, but the milch camel is staggering.
We need wise, courageous and fair-minded government which thinks of the long term. What are our chances of getting it?
By Chris Snuggs
Learning from Dogs 
Some comments on what is called the Debt Sustainability Framework, something developed mainly to see if very poor countries could afford taking on more debt, are totally relevant to this post and you find them here: http://bit.ly/bfPMw0
Besides that, let me tell you that, in Portugal’s case it is in fact mostly the private sector that has taken on too much debt… perhaps not your Señora Tristeza but perhaps Señor Tristeza.
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Thanks Per – I sometimes ask myself if I am too pessimistic (it’s in my nature). Then I read the next day’s headlines and I am reassured of my normalness, at least in respect of my pessimism!
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