Budget 2010: We are in danger of ignoring Britain’s real debt disaster

Every day, especially in this Budget week, you can read articles to your heart's discontent about government debt. I am not objecting to that: government debt is just as big a problem as people say it is. But you read very little just now about the personal debt which threatened to destroy us 18 months ago. Yet it explains our unhappiness, and our poor future, just as clearly as does Gordon Brown's borrowing. You have to put the two forms of debt together to see why we, as a country, as individuals, and as a political system with an election coming, do not know what to do next.

In 2003, which is now generally accepted as the year when policy in the Western world decisively took the path of profligacy, the mortgage debt of the British people amounted to £775 billion, or 68 per cent of Gross Domestic Product. This year, it is reckoned to be £1,253 billion, which is 86 per cent of GDP and works out at £49,000 per household. On top of that is another £340 billion of other forms of household debt, which pushes what we, as individuals, owe, to 9 per cent more than what the country produces in a year. All this debt is still growing. Read more
No comments will be posted without a full name and location, see the policy.