Can Britain escape its doom loop? The country has become a cautionary tale for what happens when politicians can no longer borrow their way out of unrealistic campaign promises. America, take note.
London remains glamorous, but not much else works in Britain. The bandages holding together its leading institutions, including the National Health Service and the justice system, fell off during the pandemic. More than four years after Britain’s vaccination rollout, as of September, a backlog of 6.2 million patients are waiting for treatment and 78,000 cases are pending before courts.
In response to these challenges, the Labour Party government has opted to hike taxes and revoke rights. BBC News reports that the government is considering ending jury trials for many defendants, leaving their fate up to only a judge. Justice Secretary David Lammy, who tweeted in 2020 that jury trials are a “fundamental part” of the “democratic settlement,” now oversees a department that says there is “no right” to trial by jury and plans to propose legislation that will limit such trials to suspects charged with the most serious violent crimes.
Faced with a seemingly insurmountable challenge, the government sees no way out but to chip away at a core pillar of a free society. The outrage has been loud and widespread, and the Ministry of Justice may back off. If Lammy moves ahead, it would not be on principle but out of desperation.
This is what happens when a rich nation runs out of resources. The collapse of market confidence in Britain in 2022 – when Liz Truss’s 49-day government tried to borrow £100 billion to usher in energy price controls – turned the U.K. into the poster child for irresponsible overspending, from which it has still not recovered.
Other rich nations have a worse debt to GDP ratio. Britain hovers around 100 per cent, with America around 120 percent and Japan at a staggering 240 percent. Yet the bond markets pay extra close attention to the U.K. now, leaving the country burdened with the highest borrowing costs in the G7. The government will spend roughly £100 billion to service its debt this year, nearly 9 percent of total spending.
The burden was illustrated Wednesday when Chancellor Rachel Reeves proposed her annual budget. After promising tax hikes last year were a one-off event, she has announced another round of hikes, adding up to £26 billion by 2029, taking the tax burden to a record-high 38 percent of GDP.
The government wants to spend a lot more money than voters are willing to pay in taxes. So politicians have to craft narratives, pretending like the money is coming from somewhere else, and that the annual deficit and national debt are a top priority — always to be addressed next year.
Sound familiar? Tariffs are paid by foreign countries, according to President Donald Trump. The national debt is a great concern – never mind that the Big Beautiful Bill did little to cut spending. America might be safe for a while longer, thanks to the dollar’s status as the world’s reserve currency, but no country spending wildly beyond its means is immune to reality forever.
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