Rally Against Debt

Saturday 14th May saw several hundred demonstrators gather on Old Palace Yard, opposite the House of Commons, to protest against the burgeoning National Debt… a debt that will hang heavy on the generations of taxpayers to come. 

Organised by the Taxpayers’ Alliance, fellow-travellers and supporters, the event included speeches by politicians, bloggers, think-tankers, and journalists warning of the dire political and economic consequences of the massive expansion in Britain’s National Debt. 

The Taxpayers’ Alliance write-up is here; Guido’s report is here; and the Telegraph reports it here.  One of the BBC’s typically “balanced and impartial” reports is to be found here. My good friend Brian Micklethwait collected (and posted, here) photos of many of the home-made signs on show – mine included!

The scale of Britain’s National Debt is truly collossal – and growing at an alarming rate as the Taxpayers’ Alliance Debt Clock makes clear:

What is more, paying for the National Debt is not just a burden that will be borne by our children and grandchildren. The National Debt is also a tax upon the present in two ways:

First, we are seeing higher taxes and, supposedly, public spending cuts to service the National Debt. The interest on the debt is now one of the largest expenditure lines of the government Budget – and is the largest item when the full extent of government borrowing is factored in.

Second, the National Debt also diverts funds from supporting other investment opportunities that would have produced real returns, as the sale of government bonds dry up the supply of loanable funds available to businesses, thereby contracting their economic activity in the present.

So the Debt is not just future consumption foregone as we pay off the bank loans; it is (higher) present production and consumption foregone.