Posted: Nov 22, 2022 9:39 am
jamest wrote:...with the national debt at about 130% of GDP and generally trending higher, combined with a current treasury/bond (debt) market sell-off and high inflation with nothing but a recession on the cards, that catastrophe looks very probable to me.
It depends what you mean by catastrophe. The next few years look pretty grim, and the UK is in for a particularly bad ride (if you compare to western europe, the G7 or a similar collection of countries) and I don't think that's in dispute. What probably is in dispute is the scale of that "catastrophe". Based on your previous comments you're probably exaggerating by a scale factor of a hundred or so.
In pointing out that exaggeration I don't want to be unclear: I agree with the consensus that Britain has a serious financial black hole (deficit, not debt) and that the coming cuts (and to a lesser extent tax rises) are going to hit at a bad time. If you agree with the Keynesian view, that will lead to further stagnation yet to come. Brexit effects do finally seem to have actually become a significant and visibile factor in the UK's underperformance and the often overstated case against Brexit does finally seem to be gaining meaningful traction.
As far as national debt goes, the good news is that the biggest way to reduce this (in real terms) is to have high inflation, which is somewhat ironic in this thread where it goes decidedly across the grain of the supposed thesis. The continued lack of productivity growth which is at the heart of British woes continues to fail to be addressed by much of public debate, which seems to centre on immigration, which will undoubtedly affect growth, just not productivity or growth per capita.