What crisis? The whole business can seem a bit unreal if you are like me, and most of the people you know are on salaries, and are not in danger of losing their jobs. But recently I had a carpenter come to fix some cupboard doors, and he told me that he was now only getting enough work for 2 days a week. The following week, the chimney sweep told me that he was getting so little work that he wasn’t sure he could stay in business. I suppose that getting your chimney swept is a pretty easy thing to defer when you’re short of cash. I daresay the carpenter would give it a miss (if he had a chimney), and I daresay the chimney sweep would postpone getting the carpenter in (if that is what he had been planning to do). Which I suppose is what recession is all about.
It’s all about ‘the debt’, isn’t it, about austerity being necessary to pay ‘the debt’. ‘We’ collectively owe a lot of money, partly as a result of the government having to spend billions bailing out the banking system, which was itself too deeply in debt. But who do ‘we’ owe the money to? You’d think sometimes we owed it to aliens on the planet Zarg, who would come down with rayguns and destroy us if we failed to repay. But in fact we owe the money to whoever chooses to buy government bonds, and that tends to be institutions like pension funds, very possibly yours or mine. Not aliens at all. All very strange.
But whoever ‘we’ owe it to, how does it help ‘us’ to repay it, if the carpenter and the chimney sweep lose so much business that they pay little or no tax, and can’t afford to give business to other people?