George Osborne, you are a glorified loan shark. You know that as long as national growth continues to grow that national debt is manageable. You know that as long as we have growth and that debt will shrink as a proportion of our GDP. But you don't care do you? You insist on stringent austerity measures. You insist on 20% VAT that adds 0.7% to inflation. You insist on wage restraint while inflation straddles 4.0-4.5%. You don't care do you?
The graph above clearly shows that while Osborne obsesses over the national deficit he willfully ignores the personal debt problem facing the UK. During his watch UK Households will accrue £566bn more debt in the next five years. That is an increase of 36% of our entire UK personal debt but in just 5 years. What is the point in focusing so heavily on National Debt if personal debt is so out of control. Personal debt is growing much faster than GDP and is much much much less sustainable than national debt. Why? Because while the state can rely on rising GDP, we as individuals will have less total assets as a percentage of national income. (see below)
This unsustainable personal debt bubble is a shambles waiting to explode. Personal debt is growing while ability to pay our debts is shrinking. The solution is of kindergarten difficulty to grasp. Decent wages, job growth, government spending and affordable houses can reverse this freaking nightmare and it is about time someone woke that shyster in No. 11 Downing Street up to this fact.
Source: OBR, LINK
Full article here
No comments:
Post a Comment
Note: only a member of this blog may post a comment.