This is the IMF’s estimate of the amount of percentage points by which countries would have to increase their debt-to-GDP ratios before their debts become unsafe. Notice that the UK has plenty of space (although not as much as others). So why does George Osborne insist on increasing austerity?

Flip Chart Rick has a few words of advice before George Osborne opens his mouth and sticks his foot in it during his July budget. Here’s a quick summary:

There comes a point at which public debt damages the economy but that point will be different for different countries, depending on their circumstances at the time.

Attempting to pay off debt when they don’t need to could do more harm than good.

For those that can afford to, then, it’s better to let economic growth do the job of reducing debt (as we have done in the past) than to subject ourselves to unnecessary austerity.

Does government debt matter? Yes but the UK is still a long way from the point at which it becomes a serious problem. We are not, and never were, anywhere near to being like Greece (yes, people are still peddling that one) and it doesn’t make sense to act as though we are in some sort of crisis. Even the OECD has advised the government to ease off on its planned spending cuts on the grounds that they will damage growth. Is another round of austerity really necessary or is it just another vanity project?

The full article is here: How big a problem is the UK’s public debt? | Flip Chart Fairy Tales