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Interest rate payments are lower now than they were pre-pandemic, even though total debt has spiraled. CoE is not signaling for a return to austerity, and hopef
by dundarious 6y ago
Interest rate payments are lower now than they were pre-pandemic, even though total debt has spiraled. CoE is not signaling for a return to austerity, and hopefully nobody will in future. WW2 debt was paid off even while creating the NHS, etc.
- nprateem 6y ago> Interest rate payments are lower now than they were pre-pandemic For now. But some major ingredients of inflation are on the way: currency devaluation and more expensive imports, both due to a no deal/shit deal for Brexit. And if inflation goes up, interest rates will increase to try to control it (or even more government spending which will rack up even more debt). > CoE is not signaling for a return to austerity How else will we repay the enormous debt? They won't call it austerity just like they're now using the euphemism "Australia-style deal" instead of "no deal", but austerity is coming alright (that along with tax hikes).
- disgruntledphd2 6y agoWhat debt? The Bank of England has created most of the money, there's really no-one to pay it back to. Certainly you should pay back the debt owed to external agencies, but there's no need to pay back that owed to your Central Bank. If that's too crazy, then refinancing all of the debt over 30 yrs is probably the best solution, as it provides time for the economy to recover. Conversely, given that demand from the private sector has dropped, if you introduce austerity then it will take longer to pay the debt back.