Debt as a security concern

toco

And the idiotic Labour supporting David Blanchflower suggests the erratic and dysfunctional Gordon Brown would make a good President of the IMF.Talk about giving the bank robber the key to the safe!

John birch

I allways said that world war 3 was the destruction of Russia through financial methods to collapse the economy. Nice to see I wasent far out even if most people thought I was mad.

Verity

Cut all foreign aid to zero.

Britain, the US, Canada, France, NZ, Germany etc etc etc have all prospered without handouts.

Let them develop themselves or fail. So what? How is their failure to climb out of the Stone Age our responsibility? Africa is the richest continent on the face of the earth.

TGF UKIP

"The implications of debt are, in my opinion, still under-discussed in Britain." Quite so, Fraser, now go and tell that to your mates who didn't mention the debt, only the deficit, in their 2010 election campaign thus playing into Gordon's hands so he could nicely leave debt and deficit completely conflated in the voters minds so they understood halving the deficit to be the same as halving the debt.

Now while such a massive and damaging omission might seem nowt more than sheer political stupidity - always quite credible in Dave's case - I am much more inclined to the view that it was all down to the genius of my mate The Labour Mole whose primary aim was to ensure the size of the Labour defeat was constained and that the Tories did not win an overall majority.

The still more glaring omission of any mention of debt, though, was in your client's Budget speech where once again (as far as I can recall) debt did not get so much as a mention.

RCE

In which case the government should cut spending at a far greater rate than it is doing. Is this not obvious to anyone with a brain?

His statement "But they fail to spell out the inevitable result, more borrowing, more tax rises or more cuts elsewhere" illustrates the detachment of the political class from the rest of us. These 'inevitable results' of 'cuts elsewhere' are 'spelled out' every day on this blog and numerous others, the Daily Telegraph being just one.

But as you ask, here are a few suggestions for 'cuts elsewhere':

1. Climate change/green lunacy.
2. DFID.
3. The EU.
4. NHS treatment for foreigners.
5. Welfare and compensation payments to those who wish to destroy us (including the Gitmo bunch).
6. Bailouts for repeatedly profligate Euro members.
7. Welfare payments to newly arrived immigrants - if you can't support yourself, don't come.
8. Local council and public sector fatcats - pay capped at 100k (itself over-generous).
9. 'Lifestyle' treatments on the NHS.
10. The Barnett formula.

That took me less than 3 minutes, and I've a few more which may not get past the censors; moreover, if you did just any half of these you'd get a landslide at the next election.

And they call themselves Conservatives.

RCE

And another thing, "those who are arguing for a fundamental reassessment of the Defence Review" are actually doing so because its conclusions were proven to be wrong within 6 months of it being published.

Does he really think we are all that stupid?

Alex

Brown did intervene to save the banks, and he had to because the banks failed. Capitalism caused the problem of finance and therefore (according to Fox and Nelson) the problem of security....

..if we really have to cut so far and so fast... which is debatable....

Bruce, UK

Endless money forms the sinews of war.

Cicero

Chad Noble

Liam Fox is right. Debt is now a bigger threat than climate change.

The RallyAgainstDebt was clearly the birth of a movement which will rapidly grow as more people see the debt catastrophe ahead.

TrevorsDen

2 world wars impoverished us. As a result we withdrew from the world. Now look at it.

To imply that current debt is OK simply because 2 previous debts broke us as a world power is typically loopy socialism.

But the other thing is we are getting precious little for our current defence spending. It has been hopelessly mismanaged by Labour, but our pretensions before that were all too grand.

Our defence procurement and our whole defence posture are buggered thanks to Brown and labour. We need very much to pull back and get out of as much involvement as we can. This is precisely why we need to start using aid as the best influence for influencve we can.

To argue that aid money should be used for defence is to miss the point. All it will be used for is to give the defence chiefs lots of shiny new toys. Toys that will be useless at achieving anything.

We could double defence spending but it would still not give us the ability to sustain ourselves in Afghanistan - it would of course allow us to kill even more soldiers for marginal effect but it probably would nor have helped us keep the peace in Basra either.

Fighting long term wars over many years means you kill and maim many soldiers and we do not have the manpower to do that.

annassasin

Sadly another example that the Tories cannot communicate effectively, the public is tired of blaming labour for debt.

TrevorsDen

'intervening to save the banks' is not related to the deficit.

The deficit comes from a whole range of unsustainable out of control spending (defence spending itself was wholly out of control) accompanied by a collapse in revenues.

Rhoda Klapp

Agreed. All that waffle about punching above our weight or wielding influence or soft power counts for nothing if we are broke. Conversely, being prosperous would count for all. Necessary and sufficient, you might say.

Noa.

No need to conquer the West by force, its already been bought in the fire sale and the new owners are still moving in.

NickW

Someone should be reminding students and secondary school pupils every single day that it is them who will be paying the Country's debts.
The penny has not dropped yet.

Dave B

By the 'savings rich East' I take it you mean China, which has economic problems of its own. We're in a mess, but so are all the other big players.

Australia on the other hand is sitting pretty.

normanc

This is verging on incoherence. We should be asking 'Is our defence spending (and forces) equal to our current commitments and any conceivable future actions, based on the past 30 years?'

If it is, fine. If it is not we should spend more. We don't need to borrow to do this, the government spends massive amounts, we can surely cut elsewhere. If we are spending more than we require then we should spend less.

That's why the Soviet Union spent so much, they spent a relatively high amount in GDP terms but they had to keep up with the USA. I cba to look up the figures but I'd be surprised if the SU was spending more, absolutely, than the USA.

The lessons of history are also clear about having an underfunded and unprepared defence.

Kennybhoy

What normanc said. Particularly his last paragraph.

"The lessons of history are also clear about having an underfunded and unprepared defence."

Indeed. It is the same mentality which at a domestic level skimps on or even entirely neglects to pay for insurance.

TrevorsDen

normanc - we have our homeland protected by NATO. NATO won the cold war.

Protecting ourselves from muslim fundamentalism is only partly a military matter. The military aspect of that is not going to be helped by two giant aircraft carriers and the exotic jets to fly off them. The total unbalancing of our defences is labours fault and they made it financially impossible to cancel these carriers.

Thus there is no real sensible solution possible.

RCE

Truly shocking ignorance from many Coffee Housers. But you will be able to reflect on it when your children and grandchildren have to fight wars because you couldn't be bothered or just didn't care.

This is the real world, you know.

Jack R

It seems it's 'foreign aid' spending which is sacrosanct with this government, not national security and defence.

Kennybhoy

Grofaz wrote:

"normanc - we have our homeland protected by NATO. NATO won the cold war."

I bow to no-one in my admiration for the NATO, there is a wee NATO flag

Protecting ourselves from muslim fundamentalism is only partly a military matter. The military aspect of that is not going to be helped by two giant aircraft carriers and the exotic jets to fly off them. The total unbalancing of our defences is labours fault and they made it financially impossible to cancel these carriers.

Thus there is no real sensible solution possible.

Yow Min Lye

It's interesting, but both Germany and Japan never enjoyed so much clout in the world (nor to say prosperity at home) than when they gave up invading other countries and concentrated instead on flogging cars, washing machines and television sets.

"Uh, just a glorified transistor radio salesman", President de Gaulle once scoffed of a visiting Japanese foreign minister. Not long afterwards Japan's GDP overtook that of France, and shortly afterwards that of every other European country too.

Meanwhile, China is doing quite nicely without feeling the impulse to garrison troops in every far-flung corner of the globe.

commentator

Fox will have to try a lot harder than that. In May 1940, the Netherlands was a rich country. Much good did that do it. The reality is that the Coalition went for the defence budget because it was a soft target and cutting it please the Lib Dems and their friends on the Tory left. The Coalition, being a left-leaning government, has no desire to turn off most of the funding for Labour's vast client state; and the begging bowl politics of Scotland, Wales and Northern Ireland. If it did, the defence budget would not be an issue.

Kennybhoy

Grofaz wrote:

“we have our homeland protected by NATO. NATO won the cold war.”

I bow to no-one in my respect and admiration for the NATO of that era but this is only partly correct. Margaret Thatcher, Ronald Reagan and Pope John Paul the Great won the Cold War. I very much doubt that we will be seeing their like again anytime soon and in the absence of such whom here would rely upon a degenerate C21st NATO?

“Protecting ourselves from muslim fundamentalism is only partly a military matter.”

Indeed. And protecting ourselves from Muslim fundamentalism is only part of a genuinely balanced military capability.

“The military aspect of that is not going to be helped by two giant aircraft carriers and the exotic jets to fly off them.”

In respect of the RN's carriers. I for one believe that it is as vitally important for Great Britain to retain a significant and independent force projection capability as it is for us to maintain an independent nuclear deterrent. No other military asset conveys such flexibility, such balance even...

“The total unbalancing of our defences is labours fault and ...”

I bow to no-one in wholehearted contempt for the previous government but once again you are only partly correct. The present rot predates New Labour. It dates back to “Options for Change 1990”. From that point on overstretch and lack of focus were truly systemic. But it was not just the obvious cuts in manpower, materiel and capability. Something indefinable changed back then and I have difficulty pinning down what it was to my own satisfaction...But that is to digress.

“Thus there is no real sensible solution possible.”

Yes there is. Cut expenditure elsewhere.

Kennybhoy

Yow Min Lye wrote:

"It's interesting, but both Germany and Japan never enjoyed so much clout in the world (nor to say prosperity at home) than when they gave up invading other countries and concentrated instead on flogging cars, washing machines and television sets."

It is easy to enjoy such parasitic clout and prosperity when other nations bear the cost of your defence. Whether or not it is honourable is another matter entirely.

anon

As a great Roman Orator once said: "the sinews of war...unlimited money". Every great power in history rose upon the back of wealth and collapsed when its wealth was eroded. The British public seem blissfully unwares that our standard of living is going to steadily decline over the next century as other country's increase their wealth at our expense unless we make radical changes. Sometimes you wonder how that can be? And then you're reminded that the Romans couldn't see it coming even after the Visigoths sacked Rome...

Noa.

Kennybhoy 11:06pm & 11:13pm

Excellent posts both.

Justathought

Fox is right to highlight the security risk of national debt and he should demand to get better value for money spent on defense.

We should also focus attention on personal debt as this is holding back the recovery.

If we are to avoid the Keynes paradox of thrift we should look to 'reprofile' personal debt, especially mortgages. The government must leglislate to reduce the face value of every mortgage. If property prices recover then the banks can share in the increase.

The banks are now making billions having been bailed-out by the taxpayer and they should now share the responsibility of the havoc they have caused by irresponsible mortgage lending.

It is only when national and personal debt has been reduced that the consumer and economy will grow.

RCE

Yow Min Laye says: "Meanwhile, China is doing quite nicely without feeling the impulse to garrison troops in every far-flung corner of the globe."

Give it 50 years, and we'll see; but the String of Pearls should give some idea of China's "impulses".

normanc

TrevorsDen, I wasn't saying we should be stuffing the MoD with more money, or building this or that, I don't know what we do or don't need, militarily.

My point was that approaching this on the lines of 'We have to cut defence spending because we will have to borrow to pay for it' is incoherent. You could say the same about health, education, any vital government function (which defence is, in my opinion the most vital).

Why he chose to take this line is completely baffling. It's like saying we can't afford to persecute criminals because it costs money to run a police force and court system.

Sir Everard Digby

And if we do truly want to learn the lessons of history,we would understand that military spending only increases in time of war and is cut back severely during peacetime.

The political classes need to make a decision which defines the approach to spending. Are we at war or not? I am afraid that question has been the summit of ambivalence in the last ten years.

For example,
Who are our enemies? Why do we let some who would be classed as such live here and speak against us?

Without a clear national will and direction, all is a muddle. The issues with defence spending are merely symptoms of that.

RCE

The NATO groupies need to get real. The point about NATO is collective defence, but no other NATO country is serious about defence other than perhaps France (who have different strategic interests) and the US (who are going to cut back massively and can't get out of Europe quick enough).

Believing in NATO in 2011 is the same as believing in the Maginot line in 1939.

TrevorsDen

Norman...
We are still spending huge sums on defence. Our nations core defences are secure with NATO. That is quite vital. We do not face a European war, I know of no one who suggests that we should invade Russia and I do not see China invading us any time soon.
We have a nuclear deterrent and I think we can replace it sensibly within our means.

Our initial involvement in Iraq was sustainable but we totally lost the ability to secure Basra long term and the same happened in Afghanistan.
So I ask what is the purpose of yet more defence spending?

Our defences have been undermined by Labour who have committed us to gigantic ships we do not need and cannot afford. We are vastly overcommitted in our defence budget leaving aside the actual cuts.

The situation we face is simply an impossible one. We have ended up achieving nothing spending money and blood around the world.
Kennyboy says we need to have a force projection power? Huh? And what power do these carriers (initially build without catapults!) actually project? See above; we have shown we cannot sustain any 'projection'. These ships are far too big for what we need.

Instead of building carriers we should have been building drones and the infrastructure to manage them, we should have been expanding our special and elite forces.

oldtimer

The point Fox makes is fundamentally true. History clearly shows that empires decline when they over reach themselves and are unable to fund themselves. Ferguson quotes the examples (p309) - Hapsburg Spain, pre-Revolution France, the Ottoman Empire and the British Empire in the 20thC. Next up: the USA. In todays world QE was not just about saving the banks; it was and is about saving the state.

It is an unfortunate fact that the British political class, exemplified by Blair and Cameron, have displayed an overweening presumption about British military power and a shocking ignorance about why, how and where it should be deployed.

DavidDP

"Britain, the US, Canada, France, NZ, Germany etc etc etc have all prospered without handouts."

Factually inaccurate. At various points throughout their respective histories, the countries you named have all been recipients of aid.

"Let them develop themselves or fail. So what? "

The consequences of failed states do not limit themselves to the state alone, or even its surrounding area. Very often the results are us having to spend even more in terms of both money and lives.

alexsandr

What we dont know is who holds all the government debt. if it is a country that could be hostile, then that is indeed a security risk. Hmm, didnt I read somewhere China is financing many western countries????

Kennybhoy

Myself on May 19th, 2011 10:08pm.

Just for the record this was an abortive first draft of my later 11:06pm comment. I got interrupted and must have accidantally hit the post button.

The incomplete sentence

"I bow to no-one in my admiration for the NATO, there is a wee NATO flag..."

should have been

"There is a lump of the Berlin Wall with a wee NATO flag stuck in it on my desk in front of me as I type this."

Kennybhoy

PS To Speccie Techie in the Basement Cupboard.

Did I indulge in a wee bit of acronymic swearing at you in the early hours? If I did then I am most heartily sorry for doing so.

nostrodamus

@ Dave B 8:31 May 19.
"Australia on the other hand is sitting pretty"
Australia whilst in a much better position than UK, has a eco-loony labor government, and a property market on the brink of colapse. It does however have a credible opposition, and the prospect of a sensible government in four or so years time, after predicted landside victory for todays opposition.