Hyperbole? The government bond markets will enslave the citizens and subjects who pay the taxes that service their demands as surely as feudal barons demanded their lands were ploughed for their table by serfs. It is stunning that Brown’s policies have cost HM Treasury, in real terms, more than it took to defeat the Luftwaffe and the Wehrmacht. The debt obligations of the state will be £2 trillion within a few years, Gordon ignores the unfunded pensions of his bloated public sector bureaucracy and admits to “only” £1 trillion. The long term consequences of a debt burden as great as this are that Britain will have a permanently low growth economy. If, as is most likely, predominantly foreign investors hold government bonds, higher taxes will reduce the available capital which can be put to productive use in the domestic economy because the interest paid is exported. That is if they are not too worried about Britain going bust to invest at all. The chart above (click to enlarge) shows the cost of insuring in the credit default swap market against the U.K. government going bust is nearly triple the German rate. British Gilts are becoming the junk bonds of the G7.
Do people want to live in a country designed by Gordon Brown, as cheered on this morning by Polly Toynbee, Will Hutton and Roy Hattersley? Is there a prospect on the horizon of a radical government which can arrest the inevitable decline? Is there a Thatcher-like political leader who can turn around the super-taxer-tanker of state? Guido suspects a lot of internationally mobile people will be weighing up the prospects and possibly heading for the exits soon.
UPDATE : From The Times this morning; “In recent years, thousands of educated Australians have come to the UK. Immigration has been the start of a career, not a gap year, it adds. So there should be some alarm at the fact that they are heading back home in ever larger numbers: 2,700 a month compared to 1,750 a month in 2005. This is largely a vote of no confidence in the old country.”
Australia runs a budget surplus, has paid down the national debt in the good years and welcomes skilled migrants. Form an orderly queue.
Well the Germans must have like it more because the Dax was up 10.34% and the French Cac 40 was up 10.09%. In fact around the world stock markets were up. Gordon is the Global Saviour!
Nothing to do with the bail-out of the world’s biggest bank Citigroup by the yanks? BBC business reporting* is below second-rate, if it was your only news source you would be worse than uninformed: you would be misinformed.
*To be fair, Guido has knocked Newsnight’s reporting in the past but it was pretty thorough last night, covering the issues realistically.
Guido’s co-conspirators were impressed in our live poll during the exchange – and they have been pretty disparaging of Osborne over the last few months.
Some of the co-conspirators comments give a flavour:
Anyone who believes in free markets and free trade has to believe as a corollary in the free movement of people. Guido is the son of immigrants who came from Ireland and India to London in the 1950s and 1960s for economic and social reasons. They came, primarily, to better themselves. Now having lived and worked in some of the world’s greatest cities Guido still believes that London is the best of them all and is grateful that the city took in his parents.
Sure the public transport system sucks, it does in Tokyo and New York as well. Culturally New York is very self-centred and less internationalist, Tokyo is a bit of a mono-culture that just about tolerates foreigners. London is much more cosmopolitan than even New York with better French food than Paris, more bankers than Frankfurt and better nightlife than Berlin.Many people have come here without the right paperwork, they have come here to work and better themselves. They are not the problem and should be allowed to stay and given if necessary an amnesty to make them legally resident. They enrich us all. It is the people who come here to abuse the welfare state and commit crimes that are the problem.
Cameron disavows the policy and ConservativeHomies are up in arms about Boris supporting an amnesty for illegal immigrants. They should remember that one of their heroes, Ronald Reagan, supported and implemented an amnesty. London should be a beacon to those who want to be free to prosper for themselves and their families. Disqualifying newcomers from abusing the welfare state and deporting convicted foreign criminals might reduce the opposition to immigrants. Ronald Reagan did something like that when he had an amnesty for immigrants in 1986, because to him, the ultimate conservative optimist, immigration was a vital part of his vision of his country as “a shining city upon a Hill”.
Boris is an optimist in the Reagan mould who would like London to be a shining city for those seeking freedom and prosperity.
An amnesty might not be a popular stance to take, illegal immigrants don’t have any votes, but it is the right stance.