Ageless Dynasty
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Ageless Dynasty

National Debt || Problems

In the wake of the covid-19 pandemic, a deeply harmful obsession has emerged.

Like the 2008 global financial crisis before it, we can agree that the ability to repay is fundamental.

Debate on debt repayment exists for a reason. Should we stop worrying about these new figures? (Fraser Munro,2021)

[Link Provided Below]

The current period of low-interest rates continues to make the servicing of the national debt relatively manageable. So it’s hard to overstate the point about the actual cost of debt. Although, inflation would lead to adverse effects elsewhere in society, particularly for those on a fixed income.

So why the obsession?

The desire to force gilt repayment is solely destructive where it would undermine pensions: savings, life, assurance, foreign exchange, and banking sectors. I understand (far) left-wingers might want this but why anyone else?

Those promoting debt repayment don’t want the state to care where they promote a deeply harmful obsession with the national debt.

If repaying is undesirable, what next? || Here are four things to think about!

1. Why does the national debt exist? The whole reason it exists is that people trust the government can repay it but at the same time do not want them to do so. Let’s celebrate the fact that something continues to offer safe saving opportunities.

2. Should we have to talk of ‘our grandchildren having to repay the debt’? I’m bemused by this as we too have made the national debt work where the lucky ones already own some of it (private wealth). The current debate, what spending and tax policies do we really need to deliver national prosperity?

3. National debt itself is not the problem and so we should stop worrying about the size of national debt and instead consider whether the policies that change it are the best available?

4. Although, the national debt is higher in the UK than in Germany at the same time the figure remains lower than in France and America. Should the UK return to a prolonged state of economic growth?

Fraser Munro. (2021). Date Accessed: 20/12/21.

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