We are already back to square one, courtesy of the Tories and their friends in the City/Wall Street.deltaforce wrote:The national debt is around £1.79 trillion. It wasn't just borrowed by the Tories . Labour were in office for quite a few years and besides a huge amount of that was used to stop the financial markets collapsing nine years ago. Borrowing money is fine if you can service the debt, but what if the economy goes in decline due to us leaving the common market. What then? Interest rates rises ,government spending is curtailed, jobs go homes are repossessed and hey ho we're back to square onestephen500 wrote:The Tories have already borrowed £1.79 trillion, more than all Lab governmentsdeltaforce wrote:He wants to pay for it by increasing borrowing on top of what were doing now.. it ain't going to be played off by taxing the better paid a few quid in taxes. Look what happened in Greece. They can't even pay the interest payments, let alone the debt.
In the 1970s we nearly went broke to the extent we had to borrow money from the imf just to pay our basic bills. The country was in a right mess and inflation was touching 25%.
Interest rates will only rise when the economy starts to pick up. The economy is currently depressed, thus current 0% interest rates - and government spending is currently curtailed.
If the economy goes further downhill then interest rates will go down, not up - taking us into negative interest rate territory. ie. you are paying the bank to hold your money. Sounds crazy but this is actually happening in certain economies.
Therefore, if the economy declines the ability of Govt.s to service debt is generally not impeded to the extent that it might first appear.
On top of borrowing Govt.s have at their disposal the magical ability to create more money (out of thin air) and to push this into the system (its called Quantitative Easing). The Conservatives have been doing lots (and I mean lots) of it - as has the EU. Unfortunately, rather than having the desired effect of stimulating the real economy it has mostly found its way into artificially inflating the stock market (and to some extent the London property market). Not a huge help to the average Jo - but nice for the City.
Labour will print more money also, but have pledged, via a new National Investment Bank, to target the new money into real regeneration, investment and growth - not to pump up the stock market to the benefit of the few.
The idea/myth that the Conservatives have a firm grasp on the economy is laughable TBH - how could they ? Their whole raison d'etre is to reduce govt. intervention in the economy/markets - leaving it all to the big boys in the City - the likes of whom seem to be disproportionately represented in the ranks of the Conservative Party BTW.