Advancing a Free Society

The History of Britain's Public Debt Does Not Give Grounds for Complacency

Tuesday, April 26, 2011

Twice recently, the journalist Johann Hari has suggested that we are going through a manufactured crisis. The history of Britain's public debt, he argues, show that present levels are modest and there is no need for precipitate action to restrain government spending:

Here’s the lie. We are in a debt crisis. Our national debt is dangerously and historically high. We are being threatened by the international bond markets. The way out is to eradicate our deficit rapidly. Only that will restore “confidence”, and therefore economic growth. Every step of this program is false, and endangers you.

Let’s start with a fact that should be on billboards across the land. As a proportion of GDP, Britain’s national debt has been higher than it is now for 200 of the past 250 years.

The quote is from Johann Hari's blog, The biggest lie in British politics(March 29, 2011). Before that, in When will David Cameron's soufflé of spin collapse?(February 11, 2011) Hari wrote:

Beneath Cameron's entire agenda runs the biggest lie of all: that Britain is facing an "unprecedented" level of debt. In reality, Britain's national debt has been higher as a proportion of GDP for 200 of the past 250 years.

The full argument, widely blogged and tweeted, goes like this:

  • Current debt levels are historically modest.
  • So, there is no need for drastic action to contain the debt through deficit reduction.
  • In fact, advocates of public spending reductions are creating a phoney sense of emergency in order to vandalize the welfare state for other reasons.

Continue reading Mark Harrison…