Daniel Hannan writes for the Telegraph that 'the only parties that still talk of "reviving our manufacturing base" are Respect, the Scottish Socialists and the BNP.'
He says that as if reviving the manufacturing base is insane. But the current UK deficit is over 50% of what we earn per year. I don't know exactly where to get the latest figure, so by now it might be through that window and breaking into the house next door.
As I understand it, you can export things or expertise. And you can import things or expertise. And if you import more than you export, you pay the difference. This is fine if your economy is growing, because you can link the amount you bring in to the rate of growth. So you can add to total debt, but not add to the percentage debt that your country has. But in real terms, Britain has the biggest public debt ever. Some of this came from throwing cash under the wheels of banks to help them gain traction again. It's hard to slow down a juggernaut. I'm going to assume for the moment that I can't solve the problem of whether it was worth doing that, and just look at debt as 'about 50% of GDP'. The working population is a bit under 30 million. And here's the kicker. There's a UKP200bn deficit. That's the gap between stuff coming in, and stuff coming out.
Even with huge public sector cuts, there's a massive debt to service. Even if the deficit leak is plugged, there's an awful lot of money to pay back.
So either the economy has to grow within itself, so there's more money but a pound maintains its value, or it has to export things and/or expertise.
But subsidising manufacturing is much the same as a high rate of public spending - it is subsidising the job market. Taking money that could be paying off debt, and using it inefficiently. If you get a 2% increase in growth and a 5% increase in debt you've just damaged the country. Those numbers don't come from anywhere. They're just an explanation for myself. But a 200,000,000,000 pound deficit is a staggering amount of increase in debt. Manufacturing won't deal with it.
So the next task I'm setting myself is finding out which sectors of the economy move how much money to where. I won't go into it in details, but I want to find out what Britain is good at. Other than losing at cricket. Bah humbug.
Saturday Seven Up
2 days ago