Don’t Panic! The best solution to debt is growth, not cuts
Sam Brittan, writing in the Financial Times, draws attention to historical precedents for the current ‘high’ level of public sector debt. And he outlines the case for calming down about whether cuts are necessary. Treasury projections suggests public sector debt will reach 76% of GDP, just under half the level it was in 1956 when Harold Macmillan was Prime Minister. Did the Government then respond by slashing and burning public services? No it did not. Growth reduced the debt. The same is true now. Growth is the best solution to public sector debt. Continuing recession would only make it worse. Sadly, it is out of fashion to learn from the past!