Friday 20 November 2009

Britain's debt will continue to grow


The Organisation for Economic Co-operation and Development (OECD) has said that Britain has a growing risk of public debt spiral unless the Government takes drastic action to cut the deficit.

For anyone who's been in debt or even simply understands how debt works, this was obvious. If you keep spending and borrowing when you're already in debt, guess what ... the debt gets worse.

What I don't understand is how an ex-Chancellor of the Exchequer, a man who claimed to have "saved the world", can fail to understand this.

Earlier this week in the Queen's Speech the Government said it would make it a law to halve the deficit in the next four years, and reduce debt every year for the next ten. Yet the OECD figures suggest that Britain's debt will be even higher next year than it is now - causing the Government to break its own law! (Maybe Mr Brown knows that a Conservative Prime Minister who will be in charge by then!)

Britain's deficit is likely to remain higher than any other major country, including the bankrupt Iceland.

Shadow chancellor George Osborne commented: "Today is a defining moment in the debate about Britain's debt ... Gordon Brown has not just lost control of the public finance, but lost the economic argument about the crisis."

Whether they like it or not, the first step to the solution is blindingly obvious: reduce spending now.

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