Modern government: truth deficits and overspending

The Chancellor of the Exchequer, George Osborne, made a fib on television last week. When questioned about his decision to pledge nearly £10 billion to the IMF bailout fund, he said  "we've dealt with the debt crisis", and that Britain is now a part of the solution, rather than part of the debt problem. What a double-dip load of hogwash. 

Government debt is at an all-time high and the country has just nosedived back into recession. In addition, Osborne's government has actually set new records when it comes to increasing the UK's debt load. The Coalition's appetite for living on credit has even surpassed the borrowing plans proposed by Labour - which Osborne mocked as reckless and unsustainable. But bad things are never quite as lousy when you do them yourself, are they, George? 

Granted, things have moved on since the election in May 2010, what with the Euro implosion and higher fuel prices, for example. But saying that we've been dealing with our debt problem, while actually piling it on at speeds previously unseen, is doing to the truth what spaghettification does to matter; namely, ruining it. Doing so on camera without even batting an eyelid is behaviour one might expect from as trustworthy a politician as, say, Ed Balls, but the Coalition promised us something better: that they would be about a new kind of transparent politics.

As much as Osborne likes to play games with the truth and obfuscate things by using "debt" and "deficit" interchangeably, this government has done virtually nothing to reign in Government spending. It has, in fact, been increasing it. Meanwhile, Labour still bang on about the untruths  of "cuts" and "too far and too fast", but their version of reality is just as fanciful as the Coalition's. I don't dispute for a second that thousands have already suffered and many lives have no doubt been ruined by the Government's policies and the resulting lack of growth. But as long as long as the debt mountain keeps rising - which it has been - to scaremonger and hark on about deep cuts is disingenuous at best.

There has, thankfully, also been some good news of late - well, kind of. Government borrowing came within its target, but that was mainly the result of QE and ZIRP. These two measures have kept Britain's finances alive, but the lifesaving intravenous drips have done so by punishing the prudent and rewarding the feckless. The pain has simply been shifted onto consumers through inflation, and the inevitable hangover has only been deferred - thus, the measures are as useful a remedy as hair of the dog.

UK debt (excluding external debt) visualised

The real problem we have, which none of our politicians dare to mention for fear of losing face and, thus, power and their day job, is simple. Governments are spending too much. That is the essence of the Sovereign Debt Crisis - debts, deficits, interest rates and markets, all that, they are just a sideshow. This basic fact seldom mentioned in the mainstream media is one that will sooner or later come home to roost, and no amount of QE will be able to prevent it. 

When it does, the only way for us to avert an almighty fall in our living standards - when our debt mountain turns into an overwhelming landslide, as is happening in Greece - is for everybody to get off their assess pronto and begin working as hard as our Asian peers do. 

However, for decades now, our politicians have been offering us services and investment in return for re-election without concerning themselves with how to pay for it, and this has helped to spawn a something-for-nothing culture based on a sense of entitlement. As a result, we in the West have become lazy compared to our peers in developing countries who have no choice but to work for their daily bread. The chances of everyone just snapping out of this soma-induced stupor are depressingly low. Another option would of course be to just give up the hard earned luxuries of the welfare state - but that would hardly be a good turn of events either.

The hole we find ourselves in and the penchant that Western governments have for living beyond their means are highlighted well by this short and clear video about revenue, debts, spending and deficits. It discusses US debt in particular, but the UK finds itself in a similar, if not worse, situation. Enjoy.