What if a new political party arose called The Austerity Party? (Don’t read into this piece what I must believe if I post something like this — the issue here is How best to reduce debt to sustainable levels?)
Governments should be more honest about the size of their debts and young voters would be wise to get politicians to pay them off as soon as possible, says economic historian Niall Ferguson in the first of his BBC Reith Lectures.
The critics of Western democracy are right to discern that something is amiss with our political institutions. The most obvious symptom of the malaise is the huge debts we have managed to accumulate in recent decades, which – unlike in the past – cannot largely be blamed on wars.
According to the International Monetary Fund, the gross government debt of Greece this year will reach 153% of GDP. For Italy the figure is 123%, for Ireland 113%, for Portugal 112% and for the United States 107%.Britain’s debt is approaching 88%. Japan is the world leader, with a mountain of government debt approaching 236% of GDP – more than triple what it was 20 years ago.
Society is indeed a contract. The state is a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.”
Edmund BurkePolitical theorist, writing in 1790
Now, often these debts get discussed as if they themselves are the problem, and the result is a rather sterile argument between proponents of “austerity” and “stimulus”.
I want to suggest that they are a consequence of a more profound malfunction.
The heart of the matter is the way public debt allows the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn.