Now it is Britain’s turn to cry debt

As the New Prime Minister of Britain has recently acknowledged, they are in deep trouble and deep cuts will have to be made to their budgets in order for them to get out of the more than $ 1 trillion in debt. Their budget deficit is now more than $ 200 billions and all this with one fifth or one sixth of the U.S. GDP.

How did they got into so much debt, well it is the same usual story, blame it on your predecessor and say that the debt is worse than what they thought it would be. How are they going to manage this mess will be an interesting case study of how to avoid debt. Although Britain did the right thing of not entering into the Euro Zone and as such they can devalue their currency to gain a competitive export advantage, but the markets are now too smart to figure this out easily. The best way for Britain is the now to reduce their spending even if it is too painful for people otherwise with more people packed in a small area and being possibly having to offer higher rates to investors (if they do not control their spending) , Britain will see their global role diminished in the future.