There’s a lot of talk about “the deficit”. I wonder how important is that really, that such draconian measures are needed to reduce it. In relation to the overall debt that the government in the UK is carrying, a figure in trillions apparently, the deficit is a drop in the ocean.

Going back generations the state was small in comparison to what it is today. Throughout the 20th Century the responsibilities of government increased exponentially and with that so did its borrowing. As with all debt it is the ability to service it that is the important thing. In a sense future generations pay for services rendered in the past. If the nation is wealthy enough then that obligation can be carried. As long as there is sufficient growth then there is no big problem.

That future generations will be saddled with the debt of the current one is as it has always been. The commitments of the past are always paid for from the purse of the present. And why shouldn’t that be? We all stand on the steps of past endeavours. We benefit from historical toils and hardships, from the creativity, invention and sacrifice of our forebears along with the structures they built. We also pay for their indulgences. In part, taxation pays for history.

The consumer boom of the past twenty years was to everyone’s overall benefit. Every item purchased, every penny spent, over-indulgent or not, helped support someone’s existence. A liquid economy is a good and necessary thing even if it is driven by debt. Consumption is its lifeblood. Yes future generations will be stumping up but they will be doing so as inheritors of the huge material successes of recent times. These successes are inherent in societal advances, in property, in technology, in expertise, in knowledge, and in the developed social structures.

Economies will wax and wane all the while as they have always done and the public debt will be carried forward never to be cleared. I suggest it doesn’t matter much and that it might actually be trivial and unnecessary, dangerous even, to go tinkering with deficit reduction, an act done more out of ideology than anything prudent.