Archive for the ‘Debt’ Category

Freedom Watch: Judge Napolitano

8 August 2009

Judge Napolitano’s guests are Dan Hannan, Congressman Dr Ron Paul, Dr Rand Paul (running for Senate), Peter Schiff (running for Senate).

Topics discussed: socialised medicine and the NHS, unsustainable debt, big government, reduction of freedoms, corruption, career politicians.

This week’s show is hugely relevant to the UK – highly recommended.

Stop spending our future

28 July 2009

The US is drowning in debt, using much the same formula as that ‘championed’ by our bone-headed PM. Both insist that we have to spend our way out of recession.

If spending got us into this mess, how can spending get us out, without mortgaging our future?

Labour’s lies: Labour’s planned spending cuts

23 July 2009

Quite why Labour bothered to lie about it’s planned spending cuts is beyond me, when the official figures, published on the Treasury’s own website, trash Gordon Brown’s claims so easily.

The cuts announced amount to nearly £3 billion.

Some of Labour’s planned cuts, adjusted for inflation are to fall in:

Education: 0.11% (£100 million)
Business Department: 24.6%
Foreign and Commonwealth Office: 22%
Transport: 8%
Defense: 8%

Yet Labour is still in denial. A Treasury spokesman spins it thus:

“It is ridiculous to suggest that the Government is planning cuts in defence spending or overall spending next year. We have brought forward £3 billion of spending from 2010-11 in order to support the economy now and spending on operations in Iraq and Afghanistan — over £4 billion this year — has not yet been allocated for next year. On the basis of findings of independent advisers, the Government also announced in the Pre-Budget report that it would make £5 billion of efficiency savings next year, protecting funding for frontline services.”

Given the enormity of the UK’s rising national debt, can Labour only identify £3 billion’s worth of cuts?  That’s just not good enough, when you consider the amount of debt Labour’s saddling us with.

Thanks to its reckless spending thus far, our debt will increase to nearly £1 trillion in coming years:

2009: £175bn
2010/11: £173bn, total debt = £348bn
2011/12: £140bn, total debt = £488bn
2012/13: £118bn, total debt = £606bn
2013/14: £97bn, total debt = £703bn

All this assumes that the economy will grow by 1.25%, optimistically predicted by Darling but disputed by most economists. Stephen Gifford, chief economist at Grant Thornton, called Darling’s prediction “wildly optimistic”.

John Major warns of credit rating collapse

5 July 2009

On the Andrew Marr Show today:

Do not fear cuts

5 July 2009
Steve Bundred, Audit Commission CEO, writes in the Observer of the £42.9bn government debt in 2010/11:

“That forecast for central government interest payments is, incidentally, more than 40% greater than the actual 2007/08 level of £30bn. It is more than our total defence spending of £35.7bn in 2007/08, and much more than the £31bn we spent on schools in that year.
The figure represents around £1,700 for every household in the UK …”

The figure represents much more than £1,700 to the taxpayer, given the number who are officially unemployed or on benefits, and those who have removed themselves from employment, refusing to pay the government any more tax.
Say the figure is double, per taxpayer. That means nearly £300 per month extra, per taxpayer. Then consider that inflation, which is bound to rise, salaries fall and the jobless total increase up to the end of 2011, possibly.

If servicing our debt becomes more expensive due to the market’s lack of faith in the government’s seriousness to get finances under control, taxpayers will be paying considerably more.

This is no time to have a megalomaniac at the helm, particularly one who is so firmly rooted in neverland.

Steve Bundred himself called for a $50bn package of cuts and tax rises.

That should be just the start. But we all know it won’t happen under Brown.

Audit Commission Chief urges £50 bn budget cuts

5 July 2009

CEO Steve Bundred of the government spending watchdog, the Audit Commission says that party leaders are not being honest with the public on the need for cuts in all government departments.

He warns that “nothing should be off limits” and that there should be a freeze on public sector pay in order to help to reduce the national debt by £50 billion, which would return us to 2003-4 spending levels.

Just as economists are predicting a “W” or double-bottom in this deep recession, McMental supposed out loud that the economy was about to recover.  But then he also thought it was a good idea to sell our gold at the bottom of the market – and warn the markets in advance of how much he was going to sell and when he was going to sell it!  Prize twat.

The NAWUWT teaching union’s general secretary, Chris Keates gets a notional prize for truly upside-down logic; he spouted:

“The idea that you have to have some equity of misery, that because the private sector is suffering the public sector must too, is disgraceful. What it is doing is not understanding the role of public services in a recession – to sustain and rebuild the economy.”

No, dear. It is the private sector that sustains and builds the economy that pays for the public sector. Without the private sector, there would be no economy.

The Guardian reports:

“Last night a Downing Street spokesman said that it was right to find savings but added: “We have identified £35bn of efficiency savings in this spending review period. By finding these savings we can provide more resources for key public services, such as health and education.”

Didn’t Brown and Darling say they weren’t planning to have a spending review? Yet another U-turn! That’s at least a dozen this week – I’ve lost count!

Read the full article.

Pensioner bankruptcy up by 164%

4 July 2009

Thanks to this government’s profligacy, its increasing demands placed on councils causing council tax to soar, and low interest rates, pensioners are increasingly unable to make ends meet. Consequently, 2,595 pensioners went bankrupt in 2008. Rising inflation put more pressure on pensioners, whose disposable incomes were mostly spent on essentials, such as food and utility bills.

Wilkins Kennedy accountants analysed figures from the Insolvency Service, concluding that bankruptcies among pensioners rose at more than double the rate of all other age groups.

Pensioners are particularly vulnerable to rising costs as they rely on fixed incomes and interest on their savings. Most often, their disposable incomes are so low that the smallest of rises in the basic cost of living can easily put them in the red.

This government has treated pensioners abominably and I trust they will reap the revenge of the silver class at the general election – a very sizeably proportion of the population.

Read the full story.

Drowning in debt

27 June 2009

It is tempting to think that America’s debt problems belong to America alone, but that would be folly. The G20 nations regularly meet to align their countries’ policies.  So when a policy is implemented in one G20 country, you can be sure that the same or similar policy will be implemented in the others, within the space of a few years.

With that thought in mind, view the following video – and fear for the UK.

Brown’s green shoots

24 June 2009

At PMQs today, Brown droned on about spending his way out of recession, trying to justify his incontinent spending with claims that inflation isn’t a worry.

Yet.

Meanwhile, Mervyn King, Governor of the BoE bore witness at the Treasury Select Committee hearing:

“The speed of which the fiscal stimulus should be withdrawn has to depend on the state of the economy. …The scale of the deficit is truly extraordinary. 12.5 percent of GDP is not something that anybody would have anticipated even a year or two ago. And this reflects the scale of the global downturn.

But it also reflects the fact that we came into this crisis with fiscal policy itself on a path that wasn’t itself sustainable and a correction was needed.

There will certainly need to be a plan for the lifetime of the next parliament, contingent on the state of the economy, to show how those deficits will be brought down if the economy recovers to reach levels of deficits below those which were shown in the budget figures.”

… which blasts a hole right through McMental’s cunning plan to flood the country with money we can’t afford. Clearly, King knows that the UK’s fiscal woes are home grown. Let’s see how Gordon wriggles on this particular hook. King predicted that the second-quarter’s growth will be negative and that we might not return to zero growth until the new year. He said we can’t wait for the next parliament before spelling out how the budget deficit will be reduced.

Richard Lambert, Director General of the CBI and former member of the BoE’s MPC, said that the treasury’s current plans are not sustainable and we need plans to get the economy back in balance.

Even “figures close to Gordon Brown” said that the Labour spending / Tory cuts gambit is unsustainable and an inadequate platform on which to fight the next election.

Sneery Paxo on Newsnight last night alluded to friction between No. 10 and No. 11 and that King supported Darling’s stance. King defended Darling robustly on the TSC, so it would seem that Brown is out-flanked.

Conservatives’ vote losers

18 June 2009

There are two issues about which the public feel very strongly – Britain’s debt and a referendum on the Lisbon Treaty/EU.

Inheritance tax -v- Britain’s borrowing:

By 2013, Britain’s debt* will be just under £3 trillion, given McMental‘s spending commitments which include current borrowing, PFI (off-balance sheet), public sector pensions and bank bailouts. So far. This could rise if Brown decides to purchase public affection with more debt or if further bank/business bailouts are ‘needed’.

The markets rightly view this vast debt with alarm, as it saddles the taxpayer with the equivalent of a second home mortgage. There is only so much the average household can afford to pay in extra tax. To service this debt, the government will therefore have to borrow. That’s right – borrow more money to pay the interest on what it has already borrowed. When it becomes clear that nobody is prepared to purchase our debt, the cost of borrowing will rise, so increasing our debt cost in a vicious upward spiral.

This economics from the mad house is where Brown feels right at home.

The public is deeply uneasy about our prospects – especially those in fear of redundancy and on low incomes because they don’t have sufficient disposable income to build up a safety net should the financial floor crumble beneath their feet.

They worry about the basic services and do not want to see their taxes spent on people who are comfortably off – the category into which they would put people faced with inheritance taxes.

Cameron should promise to reduce inheritance tax only when the threat of job redundancies and falling living standards has slowed or reversed. It’s no good promising to fund inheritance tax decreases with efficiency savings, because those savings would be better spent paying back our debt and improving our credit rating.

Referendum:

The Tories have been wriggling and writhing on this for years. We are almost at crunch point at which the wretched treaty is in danger of being ratified by all member states. When that occurs, the vast majority of people will want a referendum on it, or on our membership of the EU.

Our sovereignty is at stake here and along with it, our freedoms. The ruling classes have to realise that life for them as the ‘elites’ is vastly different to life for the rest of us.

If Cameron doesn’t tackle this decisively and openly, he will find his stock falling to the point where he is in danger of winning the general election with an awkwardly small majority.

He can’t say he hasn’t been warned.

* See Taxpayers’ Alliance.