Britain keeps triple-A credit rating
One piece of good news on the day of the Olympic opening ceremony was that Standard & Poors, one of the main credit-rating agencies, confirmed that British government debt will continue to enjoy an AAA credit rating.
This is an important achievement for the coalition government because it affects the cost of borrowing on the gigantic debts built up by the previous government, who at the time they left office were spending four pounds for every three raised in taxes, with the result that the national debt doubled to well over a billion pounds.
The difficulty with this is not just paying back the principal but the interest - when Labour left office Britain was spending more in interest on the money the government had borrowed - £6,000 per minute - than on schools.
The coalition's tough and painful decision have moved some way in the right direction - the budget defecit has been reduced by 25% since the present government took office - but we still have a long way to go and such a crippling burden of govenment debt that an increase in the interest rate payable would have been a heavy blow.
And that's why the siren voices of the Labour Party, who got Britain into this mess in the first place, should be ignored at all costs. Any fool can sound reasonable while talking of how painful the cuts are and how it would be easier to reduce the defecit more slowly and lots of Labour party fools are doing so.
It sounds good, but it is an insane policy which means more debt, and so more interest to pay on that debt, more burdens which the country will still be paying back when children not yet born are taxpayers, more austerity in the medium to long term- and a real danger of ending up financially where Greece and Spain are now.