What’s happening in the world?

In my part of the UK, nothing much. It’s too hot.

But in a more general sense we are seeing something Important. The end of an Idea.

Namely that government can grow indefinitely without consequences.

California has been trying to achieve this for years and has run out of road, declaring a ‘fiscal emergency’.

Likewise in the UK. The government can not extract from taxes what it needs to pay for everything it wants to do. So it borrows, from people now alive and people one day to be born. Which carries on until someone runs the numbers and concludes that the sums the government wants to borrow can not be paid back in honest money, so lenders get nervous.

Not to mention the fact that there are going to be fewer earners and more claimants – hopeless.

This is a good article by Hamish McRae on how Economics and Politics are not in harmony:

I think I am even more concerned, though, about what might be called the burden on recovery: the extent to which resources will have to be switched out of consumption into paying back debt.

A point which leads fellow Indy commenter Deborah Orr to a bold and sensible conclusion:

Because, objectionable as it may seem to many social progressives, the task ahead now is to shrink the state wisely and well, in order to save it.

One to watch in the coming years is how far that philosophy will extend to the European Union too.

How many EU governments are going to be ready to increase national contributions to the EU pot in the next ‘Financial Perspective’ negotiations, when things are so tight in member states’ own finances?

Not, I suspect, the UK.

And if the ‘net contributors’ are coy on increased EU spending, it won’t happen.