It was once thought that living standards in the UK would always go on rising. It was also claimed, by Gordon Brown, that there would be no more return to boom and bust. Then, in 2008, the UK suffered bust like never before, along with most of the Western nations. The resulting hangover is a whopping national debt of £1,560,000,000,000 which rises by £107,000,000,000 per annum or £20,000,000 per day. The books need to be balanced and the debt paid down.
The problem is, everyone is greedy and thinks only of their own interest. We all want as much as we can, without paying for it. To be able to pay down the debt, people need to be willing to share in the pain.
There are three ways forward:
1. Carry on as we are, with our fingers crossed, hoping that the economy will grow more quickly and so borrowing will reduce. This is not happening. Our GDP is creeping up and inflation is at 0%. We are already the fastest growing G7 economy, but the growth is too slow. Generosity and charity needs to be encouraged to grow the economy, as individual consumer spending won’t be enough.
2. Wait until we are declared bankrupt, or foreign investors choose to stop lending to us. This will force spending cuts and tax increases on the UK, like in Greece, and everyone will be forced to grin and bear it. In this situation, the government will be forced to make the best of a bad situation. Hyper inflation, to devalue the debt, and a tax on savings, will follow. The government will hold a gun to savers’ heads and say, “give us your savings or else.” Hiding the money under the mattress won’t work as hyper-inflation makes money worthless.
3. Be honest about the problem and call everyone to face it together. David Cameron should explain what has happened since 2008. He should say that the government had hoped the economy would grow, but it hasn’t. And so, to avoid long term pain of bankruptcy or inter-generational debt, we need to act together now to pay down out debt. The government should work with economists to devise a plan which shares the pain fairly. This should be simple enough for everyone to understand. He should also motivate people to work for the common good and not for self. He should do this by calling for a return to Christian values of loving neighbour and looking out for the interests of others (Philippians 2:4). He should do this immediately, to give us five years as a nation to work it out. The common problem of debt has the potential to unite the nation in working together for a better future.