I don’t want to worry you but I fear we are living in a fool’s paradise – just like the investors in Northern Rock, Britain’s fourth largest bank, which went bust and was nationalised 10 years ago come tomorrow.
Not long after declaring its strategy was going well, it was on its way to Carey Street and its customers were queuing in other streets to try to get their money out.
Northern Rock was an early victim of the 2007-08 crash when the US housing bubble burst. It had borrowed heavily on the international money markets to finance its mortgage exposure and when the sub-prime – or risky – property market in the USA caught a cold it was done for.
It all came down to debt – liabilities incurred to finance risky lending at the dodgier end of the mortgage market resulting in massive institutional indebtedness.
Notorious though the human race is for never learning anything from history, I am not suggesting that 10 years on we are now in exactly the same position.
It is true that ever-rising house prices are freezing out first-time buyers who are facing a life of renting instead of daunting mortgages.
But, at least at this stage, this is more of a political than financial problem. Some Tories are forecasting electoral doom unless they build more houses.
If, however, we have another financial crisis – as sooner or later we shall –Britain, I fear, is in a weaker position to cope than in 2008.
First, the national debt has roughly doubled since then. I say roughly because it is rising at the rate of £5,170 per second – repeat second. The last time I looked at the clock it was £1.982 trillion (thousand billion).
Whereas in 2007 we owed just under 40 per cent of our GDP, we are now in the red to the tune of 85 per cent. This represents £31.835 per citizen or, more significantly, £54,757 per taxpayer. And every one of those figures is moving inexorably upwards.
At the same time Britons are reported to be trapped in credit card debt.
Ninety per cent of the current card debt is owed by those in the red two years ago.
This is not to mention the current budget deficit. We are still spending £50bn more than the Government is raising in tax. It is only fair to say that it is now one third of the £150bn deficit run up by former Prime Minister and Chancellor, Gordon Brown, by 2010.
But how Labour leader, Jeremy Corbyn, and his puppet-master, John McDonnell, can blissfully contemplate borrowing another £200bn is beyond me. Irresponsible seems to be a mild way of putting it, especially when we are already chucking £50bn a year away in interest on our debts just to keep the wolf from the door.
We are to say the least exposed while Germany, exploiting its commanding position in the eurozone, is annually stacking up surpluses – a record Euros 38.4bn last year – to the consternation of international economic institutions.
Those members of the Cabinet who believe in holding on to nurse for fear of something worse at tomorrow’s Chequers Brexit confab may well be reinforced in their Remoaning by our indebtedness. Let’s not take risks, they will say. The Borises of this world will speak of the opportunity to build a new free-trading, sovereign Britain.
After 40 years’ experience of the EU it should be obvious it is not up to much economically and saps our finances through subsidies and riotous living.
In any case, we are leaving, as Theresa May repeatedly says, I would be happier if our finances were under control.
Targets come and go for restoring the surpluses engineered by Margaret Thatcher and John Major. The Tories, up against Corbyn’s mantra on “austerity”, are being far too leisurely about repairing the damage.
But what sends me reaching for the smelling salts is the United States when the West is menaced by Vladimir Putin. Its national debt is now worse than ours at $20.7 trillion, or 105 per cent of GDP.
This year it will rack up a budget deficit of $833bn after last year’s $670bn. Worse still, next year it will be nearly $1trillion and will run around that level until 2022.
And yet President Donald Trump is cutting taxes by $1.2trillion.
What have we done to deserve Trump and Corbyn?
If we do not soon behave more prudently our grandchildren will face an ever larger bill. They ought to be on the streets demanding an end to this reckless profligacy.