In the mid 1970s, under a Labour Government, Britain effectively went bust. Prime Minister James Callaghan had the humiliating task of asking the International Monetary Fund to bail out the UK. That was the nadir of Britain’s post-war history.
Callaghan memorably told the 1976 Labour Party Conference, where he was roundly jeered by trade union leaders: “We used to think you could spend your way out of recession and increase employment by boosting government spending… I tell you that option no longer exists. And so far as it ever did exist, it only worked on each occasion… by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.”
But what of now? Since those dismal days, our national debt has ballooned to twelve times more than the 1970s figures. Another Labour administration, under Gordon Brown and Ed Balls has made the British plight very much worse.
According to Moneyweek(.com)Magazine, in an apocalyptic article titled The End of Britain, the present situation is almost impossible to solve: “when you add in all of Britain’s ‘unfunded obligations’ — promises the Government has made on things like public sector pensions — our debts swell to 900% of our economy.” And, they say, no country has ever escaped from a debt that big without total collapse.
Moreover, “There is nothing the government can do to solve the debt crisis. Better people than David Cameron and George Osborne have tried to get out of similar crises in the past – and failed. As you have seen, the hole we have dug for ourselves is simply too big to ever fill back in.”
The magazine is predicting a catastrophic collapse of the British economy not too far into the future. Will it be as bad as that? In the Moneyweek scenario:
In 1933, President Roosevelt signed executive order 6102, forbidding the man on the street to hold any significant amount of gold. In the midst of the Great Depression, the government basically made it illegal for anyone but them to hoard the precious yellow metal. Refusal to comply with these demands was met with a five-year prison sentence. That’s essentially how the US filled Fort Knox – by seizing other people’s gold.
Just last year in Hungary, facing a debt crisis similar to our own, the government nationalised all pensions. In effect, they confiscated people’s savings. Can you imagine waking up one day and being told that the income for the last 30 years of your life hangs on a government promise?
In Greece right now, benefits have been cut to the bone, salaries and pensions have been slashed up to 40% and the retirement age has been hiked to generate more income from the population – the very victims of the crisis.
The past is another country. We think we have escaped its cataclysmic episodes, but look at how the European Union has devastated Southern Europe with its profoundly ill-conceived euro currency and, even now, refuses to admit it is dead in the water. Vanity knows no bounds in Brussels.
At the limit, most people are inadequate in the scenario the global finance industry has created. They have constructed a world machine so complicated that no one person can ever understand or control it. The result is that the engine of this behemoth is now running out of control, with no individual politician or parliament able to seize back the initiative.
And the agonising position is that Britain’s debt Himalaya is much worse than even that of Greece, Spain, Portugal and Italy — the much derided PIGS.
As the article puts it, “… things won’t be this way for long. Because the simple fact is: When interest rates rise – and they WILL rise – Britain will face the greatest crisis in generations.”
Alarmist? Perhaps, but even so I suspect we are all in for a bumpy ride.
… who is the author of The Eternal Quest for Immortality: Is it staring you in the face? Available from Amazon and all good booksellers.
Coming up: Mystology: A different way of looking at the world. Also a website, mystology.com.