Poll Results

Results are in!  I’ve opted for a tabular summary, as it’s easier than a graph – sorry.  Many thanks to all those who responded…

 

Agree

Disagree

Not sure

Even before the banking crisis hit in 2008, the UK was borrowing too much money to pay for public services that, in the long term, we could not afford. 

63%

12%

25%

Dealing with Britain’s deficit and debt is the only way to get back to a strong economy. 

50%

25%

25%

What has happened in Greece could just as easily have happened here. 

12%

88%

 

If the government manages to clear the deficit by the end of 2017, it will be a significant achievement which benefits our entire economy. 

44%

28%

28%

OVERALL:

42%

39%

19%

The most immediately noteworthy element, I feel, is that, while an overwhelming number of people disagreed that what has happened in Greece could just as easily happen in the UK, a majority nonetheless agreed that the UK has overspent on public services and now needs to clear its debts!

Some food for thought (I hope!)…

Why did Greece implode?

Greece and other Euro states have ceded currency sovereignty (= ability to create central bank reserves from thin air) to the European Central Bank, which does not have a mandate to create reserves in the interests of any particular member state.  This means there is a genuine need for member states to sell bonds at market rates to fund their deficits, leading to potential funding crises in the event of a recession.  The UK, by contrast, issues its own currency, and thus cannot ever go bankrupt.  Markets know this, as reflected in the low rates for UK bonds.

How is this relevant to the UK’s deficit?

As sovereign issuer of its own currency the UK possesses an infinite ability both to run deficits and pay down debt – how could it be otherwise for a state that issues its own currency??  Furthermore, in the midst of a global downturn affecting all major economies and trading partners, there is only one feasible way of reviving the private sector, and that’s by running a large government deficit.  As the three people who read my previous post on the sectoral balances will recall, a government  deficit, by definition, equals a private sector surplus – the larger this surplus, the greater the ability of the private sector to pay down its debt – simples!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s