Adam Memon and the Centre for Policy Studies reckons I’m an Economic Defeatist and that the cuts proposed by George Osborne for the next parliament are “both necessary and feasible“.
The cuts are necessary, says Adam, because debt interest payments are rising to unacceptably high levels.
It’s true that debt repayments are increasing and they are taking up an ever larger percentage of public spending.
But are they yet at unacceptably high levels?
Not unless they were also unacceptably high under the Thatcher and Major governments. This chart from the parliamentary briefing on government debt, published just before Christmas, shows that, relative to GDP, debt repayments are still lower than they were in the mid 1990s.
Government debt differs from that of households because repayment costs are fixed when the money is borrowed. Any money borrowed now will stay at today’s interest rates. That’s why the government is refinancing
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Tory Britain! 