Two more illustrations

of the financial mess that 12 years of G.Brown have got us into.

1) This financial year the government budget deficit will reach about £3,000 per man, woman and child. This is the millstone from just one year, but it is likely to go for some time (for ever almost if G.Brown and E. Balls are allowed to continue their mickey mouse economics,) even if the additions each year slowly decline.

The interest on this one year's new debt would cause a rise in the standard rate of tax of something like 2p or 3p, depending how many people are still gainfully employed. It does not require a genius to see that this cannot be allowed to continue for long.

2) This year the UK government will pay out more in benefits than it receives from workers in income tax. In fact the Treasury will pay out £25 billion more in various benefits than it raises from income tax. The government expects to take in £140.5 billion in income taxes, while social security benefits are projected to be £164.7 billion. Benefits are expected to rise in 2010-11 to £170.9 billion, as unemployment rises.

Of course there are other sources of government revenue, - VAT, excise tax, stamp duty, etc., and income tax even this year will not be above 25% of all government outgoings. This year, 2009-10 is the first time since 1999-2000 since benefits exceeded income tax, and in that year the difference was only £1.5 billion, rather than the current £25 billion.

3) There is another worrying spectre on the horizon, which is the mushrooming liability of public sector pensions. The unfunded public payroll ( that is the notional amount needed to pay index linked pensions) has swollen to such an extent that it becomes a major concern.

In the USA the burden is £2.7 billion out of a GDP of £9.7 trillion, or 28%.
In Canada the burden is £234 billion out of a GDP of £950 billion, or 25%
In the UK the burden is £1.18 trillion out of a GDP of £1.4 trillion, or 84%

Add in the Private Finance Initiative debts which must be met in the medium term, and other commitments, and it becomes obvious why Standard & Poors have us on negative watch, with the possibility of downgrading our AAA rating, and leading to a higher debt interest bill. They are saying that our debt could quadruple from what it is now to twice the national economic output by 2050. The conclusion is that the productive sector will have to bear an enormous burden in the days ahead.

Is it surprising that Standard and Poors, the Bank of England, the OECD, the IMF , Messrs Cameron and Osborne, and possibly the vast majority of economists are daunted by the mounting debt.

But G.Brown and his coterie seem determined to go for broke and borrow even more. Crazy!