The truth about money and debt

Now here’s an interesting piece of trivia.

Did you know that  the medieval Briton was richer than many people now living in some third world countries?  The medieval Briton  had an income equivalent to £634 a year. This is a third more than a person now living in Ghana, twice as rich as a Tanzanian, ten times a person living in Burundi, but 20 percent less  than an Indian, say researchers at the University of Warwick. This  income in England during the middle ages was more than double needed for the "bare bones subsistence" of people living in many of today's poorest countries.

Doesn't this news make you ashamed  to be worrying about the government  cuts, increased university fees, the VAT rise  and your credit card bill.  Maybe not, but perhaps  an article written by Phillip Inman in the Guardian yesterday (but not online) should make you worry.

He argues that the Coalition’s rationale for a steep and rapid deficit reduction has changed.  Critics of government policy who say we are not in the same position as Greece and Ireland and  there is no  threat of a debt downgrade, have pushed the government to defend its cutting policies.  The government  argument now is that it would be irresponsible to leave debts to our children and grandchildren.

Note the different tone.  They are now saying we need deep cuts to eradicate the 2007-09 deficit and by 2015 we will  get back to where we were. Without cuts our children and grandchildren cannot hope to flourish.

Inman tells us there is “an unabashed capitalist argument that calling in debts, repossessing assets and starting all over again is a purifying process that works for everyone even those thrown out of their home and job.”

The Thatcherite Adam Smith Institute are predicting another fiscal crisis in 2019, with reforms to healthcare and welfare necessary because, they say …”We cannot keep voting ourselves generous pensions, healthcare and other benefits and vainly hope that our children will happily pick up the bill." To the Institute such reforms  inevitably mean wholesale privatisation.

Inman goes on to say, ”tackling the problem doesn’t mean destroying the welfare state. There are subsidies for the rich that could be cut, and taxes on land and wealth that could put state finances on a sounder footing”

He quotes George Irvin professor at  London University who said recently,

“The right peddles inter-generational conflict as a way of diverting attention from gross inequalities that have plagued Anglo-Saxon countries…over the past 30 years”

And Inman concludes.” Only by tackling the problem…with fairness in mind will the Tory justification for cuts be nullified.”

DISCUSS