Now it is Britain’s Turn to Cry Debt-2

A few months ago (around June 9, 2010) I wrote a post commenting on an article regarding the state of the British economy and how they will have to cut spending and how it will effect their standing in the world. A few days ago the impact of the austerity measures started to become more apparent. The debate is what to cut and what not to since everybody feels that their program is important and it should survive the spending cut. But as the other industrialized countries are finding out that on a practical level they are basically bankrupt (you can call it otherwise or anything else) but that is what they should be calling in the markets.

Spending needs are increasing due to various factors but the revenue generation is just not there. It is just the sign of the times to come as an aging and growing population will demand more and more services and the government at hand at a loss to how to provide it without saying no or just declaring bankruptcy. But wait the country cannot declare bankruptcy since it can always issue more currency. But at what cost then the inflation will destroy it eventually (see the history of Germany after World War I). I know it is hard and difficult but better do it now and suffer now because of cuts rather than it gets out of control and then nobody amount of spending will bring back the economy from the brink.