The differences between us and the other countries are several.



The BofE is willing to act as a lender of last resort which mean it will buy bonds if there is a liquidity shortfall. The other countries don't have that. They have to get a bail out from the ECB which doesn't just happen and so lenders are less willing to hold the debt of these countries and if they are they charge a premium for it.



It is easier for us to service the debt as the interests payments always have been and still are low. A lot of the debt is long term (more than 10 years) so we don't have to find the cash now whereas these countries are in the exact opposite situation (a lot of Greek debt is for just 3 years or less).



Historically we have had even higher levels of national debt relative to GDP. It was something like three times GDP on the 1950's. We didn't go belly up then and so there is confidence the debt is manageable now.



We have much more flexibility than these countries in that we can do stuff like quantitative easing (print money) and devalue the currency.



Therefore the problem isn't that we are in the same boat as these other countries but that despite the advantages all the above gives us in our ability to deal with the current situation the current government has made a total pigs ear out of it.



Despite loads of quantitative easing, lower currency value and virtually no upward pressure on wages they have managed to choke off any demand that would lead to increased taxes, lower benefit bills etc by cutting so fast and deep. Osborne is basically the worst chancellor we have had since the end of the second world war.

You really think Osborne alone decids such serious policy?

But it seems that many on this thread are still extolling those policies!! After all, it has been said they were great and sustainable until something mysterious happened in "casino" banks (which is, of course, utter tripe) and we should have more borrowing to build more property and thereby grow the economy!

You are falling into the "all borrowing is bad" trap.

That's like letting a burns patient freeze to death.

Your patience in explaining is exemplary, would that I had that kind of forbearance.





Indeed he is.

Worse than the previously very worst.

He's often derided as not-that-bright but I think he is probably very clever, he actually knows full well what he is doing... and that is the truly worrying part of it all, he is waging class war.

He is the chancellor and whether he does or doesn't decide policy alone he carries the can but I'd be more interested to know if you now understand why we aren't like Greece and Spain. So do you?

Absolutely.



The crash/recession proved an absolute gift for them. And with the bulk of the media happy, for equally ideological reasons, to help perpetuate the lies, they've had the opportunity to take a wrecking ball to all that they ideologically hate.

Ni I'm not. But you do have to onsider, inter alia, your starting position when borrowing, your future earning capacity and what you'll borrow for. in the position the UK is in it's difficult to see an obvious way forward by simply borrowing.

I don't know anyone who is suggesting that the 'way forward' is only by borrowing.

But what are they suggesting? It seems to be Labour soundbites from the telly. What are the proposals?

Rather than the BofE printing money in QE and loaning it to banks, who then sit on it instead of lending, if we had issued 99 year bonds at 3% we could have raised the £50bn needed to build one million new homes to rent at truly affordable rates.



As I've stated before, the land is already available and is in public ownership. If that land was rented on a 99 year lease at true peppercorn rents (99p per year), to not-for-profit or charitable housing associations, then we can start to make serious inroads into a lot of this country's problems:



An average house (excluding land) can be built for £50k so the annual interest repayment on each house would be £1500 per year or £125 per month. Double that figure to cover admin and maintenance and we still end up with a rental of £250. Way below current market rates.



We currently shell out around £18bn per year in housing benefits, remember this isn't a benefit for scroungers or shirkers because most housing benefits are paid to those already in work who cannot afford their rents. Housing benefit is a landlord's benefit, nothing more or less. Building houses using the model above would put a serious dent in that housing benefit bill.

As you know I agree with "council house" building and was saying it back in 2008. But, there is the big issue that a major incrase in housing supply could force prices down in absolute terms, which could destabilise our already destabilised financial sector. I think that's why the government are looking at other so called "infrastructure " projects to wate money on.