In Charles Dickens 1850 novel, David Copperifeld a character, Wilkins Micawber, opines that ‘Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery. ‘
Obviously, there are not many readers in various governments who have learnt from Mr Micawber.
‘Britain is facing the prospect of a repeat of its crippling 1976 economic crash as soaring debt and borrowing costs raise doubts over Labour’s budget policies, leading economists have warned, according to a Telegraph report.
The crisis nearly fifty years ago saw a Labour government forced to seek an emergency loan from the International Monetary Fund (IMF) after deficits and inflation spun out of control. It became one of Britain’s worst postwar crises, with the bailout bringing deep spending cuts and Labour losing power a few years later.
Now Chancellor Rachel Reeves faces similar warnings, with forecasts showing a £50 billion ($68 billion) gap in the public finances and debt interest set to exceed £111 billion. Debt now exceeds 96% of GDP. At around £2.7 trillion, it is one of the heaviest burdens in the developed world. Government borrowing costs have surged, with yields on 30-year bonds climbing above 5.5%, higher than those of the US and Greece.
Jagjit Chadha, former head of the National Institute for Economic and Social Research, told the Telegraph the outlook was “as perilous as the period leading up to the IMF loan of 1976,” warning Britain could struggle to meet pensions and welfare payments.
Andrew Sentance, once a Bank of England policymaker, said Reeves was “on course to deliver a [former UK Chancellor Denis] Healey 1976-style crisis in late 2025 or 26,” accusing Labour of fuelling inflation with higher taxes, borrowing, and spending.
The warnings come weeks before Reeves is due to present her first autumn budget, where she is expected to announce further tax rises to cover the shortfall – a move critics argue would deepen the downturn. The Labour government also faces deepening political and economic challenges, including declining support.’
The Mail Online carries similar a similar Cassandra woe and thrice woe story about France.
‘France is facing a staggering £2.58trillion 'debt explosion' and could soon be forced into the humiliation of an International Monetary Fund (IMF) bailout as Emmanuel Macron's government teeters on the edge of collapse.
Eric Lombard, the Minister of Economics and Finance, issued a stark warning that 'a risk exists' that the IMF will be forced to bail out Paris.
The revelation comes amid widespread predictions that the French Government may be toppled in a matter of weeks after Prime Minister Francois Bayrou, 74, said he would seek a confidence vote in Parliament.
Opposition parties from Jean-Luc Melenchon's radical-Left France Unbowed to Marine Le Pen's hard-Right National Rally have vowed to bring Bayrou down. Even members of Bayrou's own camp have branded the vote plan reckless with MP Nicole Dubre-Chirat calling it 'suicidal'.’
The optimistic Mr Micawber was also fond of saying that something will turn up. The exploited majority who continue to support capitalism and provide the means for capitalists to increase wealth and power at the expense of the majority should not be waiting for capitalism to plunge into crisis which will affect those dependent upon wages, salaries, pensions and state benefits and not the minority wealth owning class.
With all its contradictions capitalist will not collapse completely of its own accord. So it behoves the majority not to wait hopefully for something to turn up but to take positive steps to educate themselves about socialism and to then work to ensure that capitalism is consigned to the dustbin of history where it should have been put long ago.
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