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I'm not an economist and I am very much to the left. That aside, the economists arguments against the fiscal charter appear to my untrained eye as valid only on the basis that our, and indeed the global economy is having a normal dip and as such, demand will rise again soon enough to apply their arguments as reasonable. I need help understanding the situation from someone(s). I've got a few questions that I would like to ask that could put my mind at rest; Is the UK debt burden still on an upwards trajectory? Moody's downgraded the UK in 2013 stating they will reassess the UK 2016 and will not downgrade the UK further if the debt burden is stabilised. If the debt burden is not deemed stabilised, will the cost of borrowing increase? Is the interest on the public debt still on an upwards trajectory? If the annual interest repayments keep increasing, is it not the case that more of the budget needs to be allocated to it in order to stabilise the debt burden? If more is borrowed to pay the debt interest, does that increase the debt burden? If that does increase the debt burden, is it more likely that the UK will be downgraded again, and the cost of borrowing shall therefore increase? I'm probably not asking pertinent questions, but from where I'm sitting, the debt problem looks pretty much a persisting global issue. The failed QE program has increased the debt burden and in turn increased the interest repayments to the degree that further borrowing will achieve little more than a GBP spiral to junk status. I despise the concept of austerity, but as it not just the UK adopting it, my suspicion is no-one anticipated QE would fail, and in turn drastic, ruinous policy has ensued. I doubt even the Tories themselves like their policy, but as ever, in the hands of the city and the central bank, they choose policy that protects it rather than the UK.
Toggle Commented Oct 20, 2015 on Steel, & austerity denial at Stumbling and Mumbling
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Oct 20, 2015