UK Debt in Perspective

  • National debt figures need perspective. This can come from viewing them as a ratio to national income.

  • That ratio has surged in the last 20 years. But despite many assertions, the debt-to-income ratios of the past few years are not unprecedented.

  • When the ratio reached such peaks in the past, much concern was expressed. But there was not a panic for immediate action. Problems may indeed follow, but they do not inevitably follow.

  • The debt can be coped with and there need not be resort to any emergency measures. Historical investigation shows how and why. Control of spending and measures to allow and, if possible, promote steady growth are sufficient.

  • Inflation is a danger, but honest government and good sense can work.

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Forrest Capie is Emeritus Professor of Economic History at the Business School, City, University of London.

Geoffrey Wood is Emeritus Professor of Economics at the Business School, City, University of London, and Emeritus Professor of Monetary Economics at the University of Buckingham.