CommentIsLinked@LDV: Vince Cable bumper catch-up edition

If only The Voice more regularly perused the pages of the Daily Mail, we would not have missed Lib Dem deputy leader Vince Cable’s most recent two articles for the paper. (Then again, if The Voice more regularly perused the pages of the Daily Mail we would most likely end up supporting flogging for immigrants, worrying about Facebook giving us cancer, and cheering on the Blackshirts). Anyway, Vince has penned two articles for the paper examining the impact of the economic crisis. Excerpts below – clcik on the headline to read in full:

We’re not going bust, but Gordon has to get a grip:

Can and will Britain go bankrupt? Should people lie awake at night worrying about the public finances? The answer to these questions is ‘no’.

The national debt is a bit like a mortgage – what really matters is paying the interest rather than the lump sum. As a country, we can do that.

But as the Governor of the Bank of England warned last week, the Government is running a very big deficit on its budget because of the recession; the deficit cannot sensibly rise further; and there have to be clear plans to reduce it as the economy recovers.

Much confusion is being caused by a failure to distinguish between the legacy problem – the amount of inherited government debt – and government deficits running forward.

The former isn’t a major problem; the latter is. Some politicians, who ought to know better, confuse the two deliberately or because they don’t understand the difference. …

Neither the Government, nor the country, is bankrupt. We are still a rich country.

Instead of a constant blizzard of meaningless or unaffordable initiatives, we need from the Government a clear routemap out of the recession.

This includes a willingness to rein in big public-spending commitments such as tax credits, public-sector pension entitlements, university education for half the population, useless quangos and ID cards.

The Government can borrow today if there is a convincing plan to borrow much less in future.

A crisis that is dividing our young and old:

Younger people are worried about jobs and expect the Government to do what it can – including using inflationary policies – to fight unemployment. Many are also burdened by debt, particularly mortgages, and want relief in the form of low interest rates.

Many older, retired people have different – indeed opposite – concerns. They are unlikely to have a debt problem and a job to lose. They are worried about inflation and are angry about low interest rates and poor annuities that deprive them of income to supplement the State pension.

These concerns are pulling generations in opposite directions. In practice, life is more complicated. …

How can we balance these interests in a better way? There has, first, to be greater financial stability so that society is not swinging from boom to bust, particularly in house prices. That requires more careful management of bank lending than we have seen in the past.

Second, when emergency measures are taken – as now – to stimulate the economy and to arrest falling output, employment and wages, there has to be compensating action to help those damaged, notably by low interest rates.

The priority should be to help those whose savings are virtually confiscated under the benefit system, which ridiculously assumes that everyone in receipt of pension credit and other benefits earns ten per cent a year on their savings. And there must be greater freedom for pensioners who are at present compelled to take out annuities.

The bigger task is to ensure that there is financial security at different stages of life and to ensure that people have incentives to provide for themselves – be it for house deposits when young or personal care when old. That means, for example, a decent State pension to provide a platform for personal savings.