this is a response to Henry Tam’s post “Debt or No Debt”

Cameron was talking about paying off personal debt and banks leading to businesses not individuals, so it’s actually not a contradiction.

Debt isn’t that much of a problem if you know how to pay it off; the problem was the deficit. Because Osbourne’s “plan A” (or “non-plan”) isn’t producing the growth he required, we’re still borrowing an NHS every year, just as Labour left things; the opposite of knowing how to pay it off, we’re uncontrollably borrowing more and more!

The real problem with Labour’s borrowing wasn’t their spending post 2008. Once the debt was huge and a crash happened, they were kind of pinned – Bailing out banks, stimulus, and QE were all sensible things to do.

The real problem was the fact that they ran a boom-time deficit from 2002 onwards (the very opposite of Keynesianism) and this when the crash happened we still had a massive debt and had trouble borrowing more to fix things without taking a credit rating hit (and thus paying more interest; quite important when you have a huge debt!)

While Scameron and Gideon, playing pin the tail on the boar (ish market,) might not be doing much to help, I much prefer them (and Vince and his “plan A+”) at the helm than Milliband and Balls, who were part of the team that ruined everything in the first place, and don’t seem to have learned from it. Bring back Alistair Darling, who actually had a deficit reduction plan, and you might persuade me.

You’re right on the causes of the current problem, although the structural problems you describe were all legacies from Labour (lack of lending to businesses from the post-crash credit squeeze, etc) and while I agree with you on more redistributive tax (which thanks to the Lib Dems this government is extending (10k threshold) and maintaining (50p rate)) I don’t believe that leaving a massive deficit running, to the point where it takes the 50 years you describe to finally pay it all off, is a sustainable solution.

This century is going to be harder than the last, as we have an environmental as well as an economic crisis to fix. Burying our heads in the sand and saying “la la la” while the debt mounts won’t fix that.