If........

The Times today has an interesting page of graphics which among other things estimates the interest costs of servicing the growing National Debt. (This is the debt which Crash Gordon inherited and that which he has indulged in. )

The interest costs are as follows:
2009-10 £22.5 billion
2010-11 £36 billion
2011-12 £46 billion
2012-13 £50 billion
2013-14 £52 billion

(These are all based on the somewhat optimistic projections made by Brown/Darling - thus successive additions to interest which must be paid diminish because they expect the recovery to be rapid, with economic growth of + 3.5% in 2011-12, figures which few independents think likely.)

The Times illustrates the (opportunity) costs of these figures for the current year. The figure of £22.5 billion could have purchased 750 new secondary schools at £30 million each, or 45 new hospitals at £500 million each, for instance.

Perhaps the most telling graphic is the scale of estimates of the percentage decline in GDP this year. Last week Darling forecast that it would be -3.5%, while independent forecasters came out with figures between -3.9% and -4.5%. Darling's estimate is lower than all six independent forecasters, some distance.

The worrying thing is that in the first three months we have apparently achieved over half of Darling's forecast, and we still have three quarters to go! Already his promise of growth again by the end of the year and his -3.5% seem to be in conflict.

What if Darling's forecasts are found to be over optimistic? The Times figures above would have to be increased significantly. Extra national debt borrowing would result and higher interest rates would be needed, especially if we lose our credit rating. There would be a real possibility of going with the begging bowl to the IMF. They would require austerity measures to restore fiscal rectitude. Crash Brown's reputation would be completely in tatters!