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a loan an actual exchange, an actual service rendered by the lender, and which makes the borrower liable to an equivalent service,--two services,

   --  Frédéric Bastiat

The more the government interferes the more it makes things worse. We have a phoney economy built on debt.

Problems in making cuts in government expenditure

Today's Western democracies now play such a large part in redistributing income that politicians who argue for cutting expenditures nearly always run into the well-organised opposition of one or both of two groups: recipients of public sector pay and recipients of government benefits.

The hole in the argument for more debt

If debt was the answer, we would never have a problem, just keep borrowing.

Credit and Government

  • Obama claims credit is the lifeblood of the economy, but actually it is proving to be a cancer
  • Credit comes into existence through savings
  • The reason credit is gone is because savings have gone, when the US ran out of its own savings, the securitisation process allowed the US to acces foreign savings
  • You can't skip the savings and go right to the borrowing and spending
  • Credit needs to go to producers so it can be paid back with the proceeds of growth.
  • Politicians claim that the books need balancing, but at the same time keep borrowing.
  • Government stimulus is really a depressant.

The moral argument against debt

No parent would borrow off their child, but what the government does is worse than that, it allows people to steal from their children. It is a form of child abuse.


David Walker - America on Brink of Bankruptcy

David Walker - America on Brink of Bankruptcy

  • Controller general of the USA says the standard of life cannot remain
  • How can the government ask us to be responsible if it is not.
  • The crisis is not immediate, but it is a fiscal cancer and it will have catestrophic consequences
  • We cannot afford the promises we have made, let alone pile on top of them

Payday loans

Phillip Booth
Banning an undesirable action isn’t necessarily the right way of solving the problem itself. As we know from other prohibitions, the effect of banning something is often to make a risky situation even more risky.
France and Germany, which both have interest rate caps, had around five times the level of complete financial breakdown – such as bankruptcy – among people who had trouble with their debts. (than the U.K).
Financial breakdown of this kind is often accompanied by difficulties in obtaining housing, employment and the purchase of essentials such as food.Furthermore, the proportion of those who are credit impaired who use illegal loans was reported to be tiny in the UK – around 3 per cent. However, the use of illegal loans was much greater in France and Germany, at nearly three times the British figure. Debt collection agencies are bad enough but, when it comes to calling in loans, illegal loan sharks have very unpleasant methods indeed.The problems do not end there. Those who cannot get credit, in markets where there are interest rate caps, tend to turn to even more expensive or less desirable sources of finance. This will include forms of finance with much higher explicit charges or the use of mail order to purchase essentials at much higher prices.None of this should imply any lack of sympathy for those who are caught in the payday loan trap. But our experience over a wide range of issues is that banning something that people – for good reasons or ill – desperately feel they need can be very counterproductive. The most vulnerable often suffer most. Trying to simply legislate away a problem does not make it disappear.

Ways of showing public debt