The Tories and the Murdoch press are crying out that Britain will face bankruptcy in a few years thanks to Gordon Brown and Alistair Darling’s supposed extravagance in this week’s pre-budget report. They claim our children’s future is threatened.
Up until last week, Labour agreed that balancing the books was the most important way to keep the system stable. But in periods of crisis, government’s have always ripped up their economic policies.
A yawning budget deficit did not stop Winston Churchill’s 1940s government promising it would create the NHS and the welfare state – it had to in order to ensure that the population would rally round the war effort.
The last Second World War debts to the US were only paid off in 2005. Britain defaulted on them several times when governments could not find the cash.
Earlier in 1933, Tory chancellor Neville Chamberlain defaulted on Britain’s debt repayments to the US from the First World War.
Despite this Britain continued on its way throughout. Nation states can borrow, run deficits and not collapse, as George Bush, who presides over a record budget deficit in the US, could tell anyone.