1. japanese uncle said...

Anyone with half the brain can appreciate the following:

(i) Culture of borrowing has been the single most significant engine of the economy for the past 15 years. Corporate borrowing fueled the economy by creating boom in financial sector (M&A, private equity, hedge funds, etc) and asset bubbles of all kinds not least in private housing markets. Households in this nation, as a result is now riddled with1.5 trillion debt, which must be repaid sooner or later.

(ii) On the other hand, even kids on the street these days know that such huge borrowing has created precariously volatile, top-heavy economy which can topple at any minute now.

(iii) The only way out is to let those parties who benefited hugely from the bubble economy share the burden, by way of introducing effective taxation not least the LVT, while everyone (in debt) must reduce debt constantly by cutting expenditure, repaying the borrowed money and saving where possible. This means reduced consumption or capital expenditure, causing economic recession for the foreseeable future. Meanwhile, banking sector must be far shrunk, to make them no more than stagehands NEVER the prima donna of the economy, as their disproportionate presence as seen in their size of debt being multiples of DGP was the very cause of evil in the current financial crisis.

(iv) All the above cannot escape pain, cause by the spiral of unemployment, recession (depression, probably) and deflation, for say ten years at least.