[prt71]

Originally Posted by Rochdale Pioneers

We don't have a problem with debt. We are not broke, we physically cannot go bankrupt.

Let me explain. Cameron made repeated comparisons to Greece. That country is in the Euro, so doesn't control its currency, cannot change its interest rates, and has very large debts all in this foreign currency which need repaying/refinancing with foreign investors in the next 2-5 years.

Britain on the other hand has its own currency. It prints this currency which handily happens to be the same currency that all its debts are in. Those debts are all long term (<15 years before payback/refinance) and the MAJORITY of them are owned by UK pension funds.

Our debt is high compared to the last decade or so (after Labour paid off a lot of debt) but compared to all our competitors in the G8 we're pretty low. And debts always sit across the balance sheet from assets, and we have rather a lot of those in the form of our money invested abroad.

We need to cut the current account deficit - we spend more than be bring in each year. Of this number a few percent is structural (Labour overspent from 2002 onwards having massivelu underspent pre-2002), but the majority is from the drop in tax receipts caused by the recession. The only way to fix this is to create growth which creates jobs which creates tax receipts. You cannot mug benefits claimants for the money - it will cost more due to the increase in benefit claimants.

So should we be worried? A little. But we're not Greece or Ireland or Eastern Europe. Nor do we have much exposure as and when those countries collapse.