I sent this New Year’s card to all our MPs and Peers to remind them of the dire state of the UK’s finances by comparing them to a household budget:
The Times City Diary (£) seems to mistakenly think that I am advocating that the UK should “look West” to what America is doing, presumably because there is a picture of Abraham Lincoln on the front of the card. No, the reason for the picture of Lincoln is the quote inside the card about trusting people by telling them the truth.
Meanwhile, City Spy at the Evening Standard grandiloquently proclaims that I am ‘wrong-footed over Lincoln’ because I have failed to spot two facets of the situation: a) ‘there’s little sense in comparing the national finances to a household budget. What may be good for one household is not good for the wider economy. If we all save at the same time, it’s disastrous’; and b) ‘Moreover, households can’t print money: governments issue their currencies and they can spend it, but households have to save to spend in the future.’
I have news for City Spy. I had spotted those points, but maybe the answer to the first is that yes, it is disastrous because that’s what we’re going to have to do. There may be no painless way out of this, because it is indeed a disastrous predicament. As regards governments printing money, amazingly enough I had spotted that (hard to miss £375 billion of Quantitative Easing) but I have to admit that I had not realised that there was someone at the Evening Standard simple minded enough to think that is really a solution. Who says standards of journalism have fallen?
The point of the analogy to a household-budget illustration I used which has been missed by this journalistic statement of the blindingly obvious is to make the UK’s financial situation more understandable. It is very hard for anyone to get their minds round the concept of a billion let alone a trillion. I think if people really understood the position the UK finds itself in they may be better prepared for what surely has to come and what has to be done, and it makes it clear that the current policies are not capable of correcting the situation.
We need to be told the truth.