October 18, 2010
The current hysteria in Britain about the size of the national debt is as usual very ahistorical. The debt levels in British history going back more than three hundred years show that the current levels are well below the average level over this long sweep of history, currently just over 60 % in comparison to levels above 250 % in the 1820s and above 240 % at the close of the second world war as the above charts based on official statistics illustrate. The Labour party under Ed Miliband has criticized the co-alition for wanting to go too quickly and therefore destructively at debt reduction through excessive cuts.
But Labour should also point out the hysteria being displayed over the modest size of the debt to GDP ratio that Britain now has to contend with. Britain in 2010 is much much wealthier and its per capita income much higher than in either 1820 or 1946 when its debt was much greater as a percentage of the GDP. The crisis is therefore a figment of the crazed imagination of the bond traders, some politicians and some financial journalists and central bankers.
The data and charts are readily available and they should be shown to the British public and to Parliament.
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