People Will Bail Out of Bail Out States

Jack Thurston, a former special adviser to Gordon’s enforcer Nick Brown, and one of early New Labour’s more cerebral types, writes in this morning’s Wall Street Journal of the perils ofA Permanent Bailout. Even a perennial optimist like Guido wonders if we are finally seeing the the delayed end of the twentieth century era of Anglo-American global dominance as predicted by the CIA. The economies of the U.K. and the U.S.A. are being burdened with government debts of epic proportions, our children (and their children as well) will be indentured tax slaves.

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.




Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Diane Abbott on Amber Rudd:

Who can have confidence in Amber Rudd to make far-reaching changes to the Home Office if she doesn’t seem able to get basic facts right?”

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.
Heidi Bye? No Comment on Labour MP Quit Rumour Heidi Bye? No Comment on Labour MP Quit Rumour
Security Risk Sugar Baby Met Dave in No 10 Security Risk Sugar Baby Met Dave in No 10
London Knife Crime Up 21% London Knife Crime Up 21%
Len Threatens Labour MPs Len Threatens Labour MPs
He Who Must Not Be Named He Who Must Not Be Named
Williamson at Smeeth Hearing in Support of Her Abuser Williamson at Smeeth Hearing in Support of Her Abuser
Bastani Not Going to IPPR Bastani Not Going to IPPR
Labour Parliamentary Candidate: “I’m In The Mood to Beat Up Prince William” Labour Parliamentary Candidate: “I’m In The Mood to Beat Up Prince William”
Mogg: Number 10’s Customs Partnership Is a ‘Cretinous Betrayal of Good Sense’ Mogg: Number 10’s Customs Partnership Is a ‘Cretinous Betrayal of Good Sense’
Why Brexiteers Are Worried Why Brexiteers Are Worried
Two More Labour Candidates Posted About “Illegal Sexuality” and “Jewish Money” Two More Labour Candidates Posted About “Illegal Sexuality” and “Jewish Money”
Labour Spent £2 Million on Private Mailshots Labour Spent £2 Million on Private Mailshots
May Told to Ditch Customs Partnership “Turkey” May Told to Ditch Customs Partnership “Turkey”
Ministers Warn May: We Must Leave Customs Union Ministers Warn May: We Must Leave Customs Union
Adam Spliff Institute Celebrates 420 Adam Spliff Institute Celebrates 420
Nick Timothy Leaves Twitter Nick Timothy Leaves Twitter
Owen’s Descent Continues Owen’s Descent Continues
Producer of Labour’s Race Row Election Broadcast Tweeted About “Jewish Kapos” Producer of Labour’s Race Row Election Broadcast Tweeted About “Jewish Kapos”
UK Tech Investment Surges 115% UK Tech Investment Surges 115%