Debt, debt, and more debt
The Spectator's Pete Hoskin has been at the Institute of Fiscal Studies today, covering their 'Green Budget' launch. He blogs about it here and here.
The scariest statistics are on debt. The IFS is forecasting that the UK's debt-GDP ratio is going to get close to 60 percent in the next few years, and that its going to take until 2032 to get it back to 40 percent (which was the maximum allowed under Gordon Brown's now-discarded golden rule).
As Pete notes though, that's the optimistic forecast. The pessimists are saying debt could reach 90 percent of GDP – which is a pretty horrifying prospect.
My biggest worry is what future governments might do to pay off all this debt. It's easy to imagine them unable to squeeze any more revenue out of taxes, but unwilling to dismantle the welfare state. Chances are they would then turn to printing money, devaluing the currency, and inflating their way out of it. Needless to say, that would obliterate people's savings and retirement funds, and eviscerate their disposable incomes.
