The National Credit
IT WILL feel odd without a National Debt. Monarchs and governments have always borrowed and frequently welshed — directly, like Charles II, or indirectly, through inflation, like Elizabeth II. The Commissioners for the Reduction of the National Debt have been going since 1786, when it was £238 million, and today it is £197 billion. Now Simon Briscoe of Green- well Montagu says that if things go on as they are — strong growth, public revenues rising fast, public spending rising less fast — we can pay the whole debt off in eight years, or surely by the end of the century. Almost worth Nigel Lawson's while to stay on. . . . What is instructive about these sums is the change of attitude they imply. The conventional assumption of post-war economics was that balancing the budget was a superstitition and repaying debt was worse than pointless. A state, like a company, should expect to borrow, would borrow more as it grew — and by borrow- ing more and growing more could make the whole economy grow. Now we have the state in strong surplus (say £7 billion this financial year) and the economy grow- ing like a runaway beanstalk. The Chancel- lor has been heard to call this 'crowding in' — the private sector crowding to use the financial resources which the state is freeing. All the same, I doubt if he will pay off the National Debt. Governments, like the rest of us, can think of more things to do with money than paying it back.
Previous page
