Thursday, 24 March 2011

Post Budget Reality

This week's budget failed miserably to match the standard needed to turn the country around.

Yesterday Cameron and Clegg's coalition proved beyond doubt that they are cast from the same metal as the previous Labour government. The differences between then is infinitessimal.

Sure, we got a who;e penny off a litre of petrol (whoopie doo!) and some tinkering was done with corporation tax, but the bottom line is nothing changes very much except the bad stuff that was announced in last year's emergency budget still kicks in this April.

The financial situation in this country is dire. Given the current policy, we face decades of depression. I do mean that: decades of depression. The government is intent on using inflation and other slow-acting measures to reduce the deficit rather than acting quickly and getting things back on track immediately. Thats bad news for all of us, as it will cost billions more in the long run.

Its like a credit card bill: we all know the least efficient way of paying off a credit card is by making the minimum payment. You might pay 30 quid a month to pay off the debt, but if you look at the statement the actual debt only reduces by a pound or two. The rest is swallowed up by interest and admin. In the long run you end up paying back several times the original sum owed, but we do it because its convenient: we pay the minimum we can get away with so the bailiffs don't come knocking at the door and so we have money to spend on other things.

The government is doing something similar with our money except it still continues to use the credit card running up more debt while it just about makes enough to cover the minimum payments. Hardly a sustainable way to finance a country. You would think that government above all would be sober and  fiscally responsible. Sure, we might binge buy and stretch the credit card a bit, but thats because the repercussions only fall on us, whereas government binge buying affects the whole country.

Government has for too long behaved like an irresponsible teenager, doing whatever it liked without impunity. Its time us the public became responsible parents and chastised our government for its misdemeanours.

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