UK Consumers Reduce Debt In Readiness For “Tax Slavery” Ahead

Despite the fragility of the UK economy and the growing fiscal deficit, the Labour Government - genetically programmed to expend more than it secures in tax revenues - has promised a further $11 billion, (£6.8bn), of UK tax-payers money to the IMF to build the fund’s resources. The extra capital, on top of the $15bn already committed by the UK, meets the obligation from April’s international meeting of developed nations in which Alistair Darling sponsored a proposal to triple the IMF’s cash base to $750bn. The additional resources will be used to assist the economic growth of emerging nations.

Not content with supplying UK money Darling has also encouraged the European Union to expand its financial support from $100bn to $175bn. The UK Chancellor also took the opportunity to predict a return to UK economic growth “around the turn of the year”.

On the subject of debt, British households have been more proactive than the UK government in the prudent rebuilding of its balance sheets. July saw the first decline in household borrowing since formal records began in 1993. Both mortgage and unsecured consumer credit balances fell. An ongoing and steady decline in the indebtedness of the nation would be a most satisfactory scenario, though a sharp fall in borrowing would endanger the UK economic recovery as consumer spending has long relied on debt to fuel consumption in excess of income levels.

Interestingly, household borrowing used to be more provocatively described as “interest slavery”. The anti-banking sector phrase, largely unheard for decades due to the popularity of consumer debt has become relevant again as the public, still suffering in recession, reflect on the unhealthy proportion of their shrinking incomes they spend on repaying debt to the very same financial institutions that took the UK economy to the verge of collapse less than a year ago. The term was first published, to my knowledge, in 1921 as Europe struggled to rebuild its economy post First World War and was used in the context: “We demand the nationwide discontinuation of interest payments, which is nothing more than robbery of the nation on behalf of global finance.”

Many readers will of course be aware that such a philosophy is practised today in some economies as the Islamic faith does not permit the charging of interest, though some lease and buy back arrangements are structured that offer similarities to interest driven transactions.

Unfortunately such is the depth of banking sector influence in politics the likelihood that UK citizens could ever secure freedom from “interest slavery” are so slim the very possibility seems invisible to the naked eye. In fact, lest I be mistaken for a revolutionary, I request readers reflect more on the “tax slavery” that will grow in prominence in the years ahead, as tax payers suffer the cost of banking sector incompetence and economic mismanagement.

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