Yesterday we heard the new coalition government talking about the huge monumental debt problems that the country is experiencing and likely to do so for the next decade or so.
Cut! Cut! Cut!
This seems to be what is being said. For whatever reason, it appears that we have, as a country, overspent and over provided during the last decade to such an extent that we now have to pay the price of that action. A price that is going to hurt!
It reminds me of what so many of us have experienced over the years, that horrible credit card debt that most of us have incurred at some stage. Yes, we can be foolish and go on a shopping spree and load our cards with ever increasing debt attracting huge interest rates each month. But I’m not really talking about those purchases but about those that we have HAD to make because of circumstance beyond our control.
• Losing our job and having a family to feed.
• The washing machine breaks down and those clothes need to be washes.
• A relative dies and a funeral needs to be paid for.
• You, your wife and children really do need that holiday!
Yes we all have relied on our credit card when things have got tough. It is easier to take out the card rather than hand over the cash – and anyway we can pay it off over a period of time, can’t we?
But I wonder how many of us watch that balance getting bigger and bigger. Then we have to pay off the minimum amount each month which is getting bigger as well, leaving us with even less cash to play with. I’m sure most of us understand this cycle.
The problem is that the situation tends to get worse and worse, and we ignore it for as long as we can. Eventually we are faced with the problem of how to resolve the debt crisis and get back to some more normal footing. We set up a plan to pay back a larger amount each month. The interest keeps on getting added! The amount of free cash keeps getting lower!
Whether we like it or not, eventually we have to cut back everywhere until the debt becomes more manageable. No holidays. No new car. No shopping sprees. No night’s out. No expensive Christmas gifts. Everything we spend, even the weekly shopping has to be trimmed and reduced.
Yes it hurts, but once it is done and the debt has gone, we suddenly find that it was all worth it, and that we have much more freedom to do as we please. We are not paying interest anymore so we have more money to spend on ourselves. We have also learnt a big lesson!
The national debt the UK has is exactly the same. We got here by irrational spending for whatever reason. Politicians make promised to get elected then have to keep them if they want to get elected next time. Whatever the reason, it has happened!
The system is such that no one appears to be controlling what is spent. That is a different issue which hopefully will be dealt with by the current government.
So, like the credit card problems we have faced, the country needs to do the same. It is all very well to say that education and the NHS should be ‘ring-fenced’ but why? We have over spent in all these areas as well. Yes I know that education could perhaps do with more money … I could do with a new car! I can’t afford it, nor can the country.
Our national debt of over £800,000,000,000 (800 billion) attracts interest at something over £65,000,000,000 (65 billion) every year and that is going to rise year upon year if we do not do something about it. We can run our education system for that!
No! If we need to cut government spending by 10% (say) to bring the situation under control then every area, irrespective of where, should have its budget cut by 10%. Yes this is going to be hard, and there are probably some valid cases where this cannot be sustained. More people will become unemployed, benefits costs will rise and the current benefits for the unemployed are simply not high enough to live on.
A compromise will be required. Just like our credit card debt, something will have to go and others remain essential. Currently all children of school age have a place and receive a reasonable education … why spend more? We introduced targets and league tables in our schools. What is the matter with them? They cost a fortune in time and money to record and report, when the money should be spent on educating our young people.
Currently the NHS carried out thousands of operations that are not deemed essential … why can’t the patient contribute or better still wait? Again the target driven strategy of today and the paperwork in creates is just beyond belief. We need to cut it out, and focus on providing real health service just as most doctors and nurses want to do!
We live in a society that is ring fenced with things such as ‘Health & Safety’. Now I am not suggesting that we should do away with it, but it has got out of control. We as individuals need to start taking responsibility for what we do. If you think things are bad here … just spend a few days in Mumbai.
Perhaps higher taxes are the answer. I don’t support the argument that anyone who earns less than £10,000 should not pay any tax. We all live here, we should all contribute something, however little we earn. I think it is better to do that so we all understand the needs of the country. If necessary give those lower paid more financial support, but they should all contribute.
I could go on and on but I’m running out of passion and desire to change it!
Let’s get out of this situation, however hard it may be and vow never to go back here again. We are all responsible for our country and we should all take that responsibility seriously.
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4 comments:
I completely agree. I think that as a culture we have become that spoilt child that can't understand why we can't have the latest pair of Nikes AND that shiny new playstation game that we want while our parents try to pay the mortgage. 1% tax hike to pay back the debt? Take it, I won't miss it, if it means getting us out of this mess. 2 pounds NHS appointment setting fee that is refundable if I actually show up? No problem! Oh, and don't even get me started on the Olympics or the Commonwealth games... if you try to tell me that expenditure is going to be a good long term investment I will show you just how to win a gold medal in the politician toss!
Jim
You are right about the fundamental issues. However, the problem is not just that we need to cut, cut, cut - we also need to change the system that enabled this all to happen.
e.g. We argue interminably about nom-doms without recognising that the fundamental problem is that smart people resent paying so much tax to have it so badly misspent. Reduce the tax rates and hit people hard for tax avoidance and you largely remove the incentive for people to avoid tax. Most reasonable people are happy to pay taxes as part of their social responsibility. It is simply that the rates are to high - especially when compounded by VAT (proposed to go up to 20%!), NI, Road Tax, Council Tax, TV Licences, Fuel levies, etc. The tragedy is that it the middle and lower classes who bear the brunt. It is an unsustainable model.
I have tried to point this out in my book, "A Feeling of Worth" and have proposed some ideas as a starting point for discussion as to how we can make the systemic changes necessary. It has to be tackled as a single problem and not a department vs department issue.
Hi Bay,
Thanks for your comments, I have to say that you hit the nail on the head.
I often wonder if these actions will really cause those richer people to move from the UK to other countries where taxes are much lower.
My Dad once said that those who might move probably already had. Most people have roots in the country they live, and will think twice before moving.
Let see the problems sorted then keep the spending down so that taxes get reduced once and for all.
I appreciate your comments and will add your book to my list of books to read as its looks really interesting.
Jim
I'm reminded of the pretentious Gordon Brown who, as chancellor, managed only to learn how to spell "prudence." It's a shame he never discovered what it meant.
Bruce Hoag, PhD, CPsychol
Work Psychologist
http://www.p-advantage.com/Blog/
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