Douglas Carswell's Blog

Today's top story is the coming default

So much politics is froth.  It is not always immediately obvious which items in the daily news agenda are of long term consequence. 

If you only have time to focus on one item on such a news rich day, make it this one by Martin Wolf in the FT.

We are on the brink of momentous events in Europe, and perhaps the wider West.  Since the credit boom ended in credit crunch in 2007, Western policy-makers have compounded their initial mistakes with some catastrophic errors.

They have converted a banking crisis into a sovereign default crisis.  They have endlessly bailed out banks and bondholders.  Yet in doing so they have shifted the burden of debt on to others, while making it weigh more heavily.

To stimulate yet more over borrowing and overconsumption in the name of "growth", they have kept interest rates ruinously low and public spending recklessly high.  The result will be anything but growth. 

The consequences of such folly cannot be averted for much longer.  It will require real leadership to cope with it.

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