Britain is the most indebted country in the world if we relate total public and private debt to per capita GDP. We are the orange line at the top in the above graph from McKinseys. The news is good or bad, depending on economic view. The arguments don’t interest me. You can see that the ‘policy’ was about long before Bliar and NuLabour and that they merely continued it. The standard answer to this condition is called deleveraging. The easy way is inflation, which is what Melvin King is doing at pace with various QEesings.
Inflation generally suits the rich as they have bought assets which generally go up. Growth is the other main way, but we have a problem with that because we killed ourselves as a manufacturer years ago (Blunder Woman if you like, but I suspect this was much earlier and involves the bankrupting of the UK by American interests and spies through two world wars) and ‘invisible earnings’ are about to turn out just that. Most of the figures Osbourne has relied on have gone down the pan and there is a structural problem with the private sector cavalry. It sold off its horses to pay directors’ bonuses.
So we cut the cops, try to sell Shropshire to the Chinese (who are also broke), and hope our debt burden will shrink, but it can’t because Britain has been down the drain so long it’s long been the case that only coppers and nurses buying imports at Tesco pushes up GDP. About 70% of what a public sector worker earns stays in her borough.
Mass unemployment is probably already with us if we really look at the figures. You have the unemployed, the sick and disabled, all those on tax credits – quite probably 15% of the working population.. We are also a net exporter of benefit cash to the east.
These are not cuts that might help with productivity or in forming what Adam Smith thought capital was in producing energy supplies, increasing skills and changing the way we can live. The private sector basically offers tat and expects us to buy more and more of it. Just at the point we should be able to invest sensibly in the future, we find the banks and associated spivs have lost all the cash. There is a ‘reserve’ – money held by rich people and their assets – we should be able to tap that by forcing bond holders at the banks to take pain and by inflating through wages and full employment (globally).
When we think about crime, we should be able to understand something of that tipping point in which crime turns to freedom fighting. The reason is that we are probably not far from breakdowns across our societies. Police begin to take some of the pain now, but we are probably only a few ‘credit meetings’ for banks away from a fatal nexus of more bailouts, high unemployment and the dawning of what has been going on, as people start to feel poor.
I wonder when we stopped being able to afford a public sector? We always have people unemployed or under-employed and now have highly productive agriculture and manufacturing. If I was still a detective I might think someone had had it away with the productivity gains – and of course, the rich have, through quite ludicrous frauds. The revolution may have started in Ireland this weekend. I hope it passes without much street violence, but I fear there will be riots if people realise how we have been sold down the river.
The pound is already so low that Euros are buying up our property. Young cops may grow families paying rent to German and French landlords, unable to afford to buy. ACPOs will have retired abroad by then (a few years on). It’s time for a revolution, but we need something more thorough than whatever pole throwers have in ‘mind’. Our values have already been trashed. I don’t know where I’d stand, other than against violence.