Excellent article in the Economist this morning that lays out the difficulties Great Britain faces in dealing with their crushing government debt. Wake up America! This is a harbinger of things to come:
- Enormous unfunded entitlements? Check.
- Socialized medicine? Check.
- Unchecked immigration that adds to the welfare rolls? Check.
- Having to go to the IMF for a bailout? Priceless.
That's right once "Great" Britain had to go to the IMF for a bail-out in the mid-1970's when their deficit reached 7% of their GDP. They are projecting a 12.4% of GDP figure for 2009-10. According to our government, and their rosy scenarios (which don't include Cap and Trade or Healthcare "Reform" legislation) we are going to hit 12.93% in 2009 and 8.54% next year.
Then there's the rate of increase - take a look at this chart from the article:
Two numbers pop - the first is the rate of increase - we are third at close to 50% over just 7 years! Then look at the forecasted debt as a percentage of GDP for 2014 - we're 4th at 112%. Think about that for a moment - the debt owed by the government will exceed the size of the gross domestic product. Repeat that a few times to yourself and see if you don't find yourself screaming "WTF??!!!"
Britain, as the article points out has the hard task of unwinding their socialist mess with reduced benefits and higher taxes (50% forecast). Why are we trying to put ourselves into their shoes?
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