Reply to post: It doesn't matter...until it does

NEVER MIND the B*LLOCKS Osbo peddles, deficits don't really matter


It doesn't matter...until it does

I don't really accept that a deficit doesn't matter in the current environment experienced by the UK. The national debt has gone from around £400bn in 2000 to £1.4tn today. To say that continuing to run a deficit and adding to this debt in these curcumstances is ok doesn't seem wise to me.

"Don't worry!" you say, the deficit and the overall national debt are just something that future tax payers have to deal with. Well, what happens when the tax base is continuously eroding due to perverse incentives (I'll not work or just work 16 hours and get some benefits too)? Who pays the debt then? Do the international community and money markets like this? Does our currency hold it's value if we continue with money printing to cover the gaps in tax receipts?

Excluding our real life situation I do agree that some level of deficit is acceptable if it is to fund useful projects, like infrastructure, or those that will give a return. It's not useful if it is run to bail out parasites on the economy.

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