Somebody needs to look at this - fast
If he had the energy, and the sun wasn't shining, Tyler would deconstruct Brown's grossly misleading account of history on BBC R4 Today this morning.
Like all that stuff about "boom n bust" somehow only being the government's fault if it's accompanied by inflation - LIKE WHAT IT WAS UNDER THE EVIL TORIES - and how he's cut income tax (overlooking the fact that the basic rate of tax is only one element of the calculation - you also need to take into account the real value of allowances and rate bands, not to mention his increase in National Insurance contribution rates).
But meh... Tyler needs to get out into the sunshine.
So let's content ourselves with the latest sighting of the Doomsday Machine.
As BOM readers will recall, the D Machine is a four-wheel drive beast that can do 0-£5 trillion in well under a decade. At its heart is a turbocharged debt interest payment accelerator that works like this: the government spends far too much money and starts running a big deficit; debt builds up and interest costs start to rise; government revenues fail to keep pace, and there has to be more borrowing just to pay the debt interest; lenders take fright and raise their interest rates; the economy slows further, government revenues sag, there has to be even more borrowing to pay the interest costs, interest rates rise again, the economy sags some more, there has to be more borrowing to pay more interest; and the pressure goes on building up, right up to the moment when the turbocharger explodes, at which point the D Machine is engulfed in a fireball of hyper-inflation.
It couldn't happen here?
The Bank for International Settlements disagrees. In a recent paper on the international outlook for public debt, they point to the UK as being the worst placed of any major economy.
On current policies, they project that by 2040 government debt interest payments in the UK will have ballooned from their current level under 3% of GDP up to nearly 30% - worse than any other country. The following chart shows public sector debt interest payments as a percent of GDP:
Or to put it another way, by 2040 the average family would be paying (in today's money) over £10 grand every year just to pay the government's debt interest bill.
And by 2040, the BIS estimates that our official public sector debt (ie excluding Enron items like public sector pensions) will be a staggering 550% of GDP (dotted red line):
Of course, this can't happen. Our credit will have been cut off long before we get to debt at that level. By then, we'll either living in a hyper-inflation bartar economy like Zim, or we'll have somehow somewhere found a bunch of politicos with the cojones to cut spending seriously.