Britain\’s public debt will explode to 180pc of GDP within a decade unless future governments take drastic measures to restore fiscal probity, according to a confidential study by the European Commission.
OK, this is the EU speaking, but still, pretty scary. Carrying on simply isn\’t an option.
So what are the options?
Attempts to bring the debt down by a spending squeeze can prove counter-productive because lack of growth itself drives the deficit higher. \”Once you get there your trapped,\” he said.
To which of course we\’ll have the cry of \”raise taxes\”!
But raised taxes constrain growth as well.
So what exactly can be done?