After watching Ed Balls on Newsnight last night (16th March 2011) I have to come to the conclusion that basic economics is beyond the Shadow Chancellor.
He basically said that, you don't try to pay off your mortgage in 4 years you pay it off over 20 or so. Very good Ed and quite correct. However, as shadow chancellor I would expect him to know that the deficit is what we are adding to our mortgage. The "mortgage" UK PLC has is £trillions, (those boom years of 1997 - 2008 and record tax take? blown it and a few billion more!) UK PLC are currently on an interest only mortgage and the interest on the original mortgage is adding each and every year by the amount of the deficit.
To put it into Ed speak. It is like having a maxed out credit card and not even making the minimum payments to cover the interest being charged, therefore the debt goes up.
1 comment:
I cannot disagree with the sentiment, however as the UKL PLC card is "maxed" if we decide to "sod it" and push our credit limit upwards, the owner of the debt decides we are a bigger risk and so charges us even more interest on our debt, pushing us into more and more debt faster and faster.
The mentality of lets go and get some retail therapy on the Visa card to ease our pain, is what got us into this mess in the first place.
Also, before anyone decides I am a Tory toff, my wife is at risk as a Civil Servant, I was made redundant 2 years ago and our household income has halved. All our children deserve better, unfortunately our only choice is to make them hungry now or starve later.
That or get rid of the Public Sector pensions liability of £2.5 Trillion! That would make a nice dent in the deficit and we could all have a party!
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