We all sat by and watched during the credit fuelled boom of the last decade as people got themselves into more and more debt. Whenever people got to the point where they had more debt than they could cope with they just refinanced through some other cheap loan company and went on spending. When the massive amounts of debt caught up with people and made them feel a little down they could always break out their credit card and go treat themselves to something to make themselves feel better.
Yes, that’s the US government, and the UK government for that matter.Like a girl buying shoes to make herself feel better the UK government has ploughed money it does not have into things it cannot afford. Money has been wasted on futile but ambitious funding for the NHS, schools and increases to public spending on the benefit system. This has mainly been to buy back public support after even more money we do not have was wasted on the unwinnable war in Iraq.
The US has been busy as well. They have now got to the point where the great debt clock is no longer capable of tracking that debt. The Rebublicans are so busy sqeezing personal profit from oil deals and military contracts that they have got the US to a point where it is over ten trillion dollars in debt. There is very little manufacturing in the US, it’s not energy independant and is reliant on other countries for food imports; this puts the US in a position where it is teetering on the brink of financial meltdown.
Of course the advice that economists give when the debt reaches that level is to cut outgoings and boost production. That means essentially creating jobs and bringing more manufacturing back into the country to both boost exports and cut reliance on imports. It’s no different from telling someone with debts to cut up their credit cards, get a part time job and to start living within their means. The US has instead decided to print more money to prop up the status quo until they inevitably get wallopped on the election and can hand the whole mess over to someone else. The UK is doing something pretty similar but has longer to go until the next election so we get to watch while Brown and Darling dig us deeper into the hole of their own making.
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