Jim Rogers is at it again. Anyone who heard the well-known investor on the Today programme a couple of weeks ago will have been left in no doubt that we are all going to hell in a handcart. "The facts are these: governments for 30 or 40 years have been spending money they didn't have. But eventually somebody's got to come up with the money - and there is no money any more," he said.
It's a familiar refrain. Our flabby, bloated, something-for-nothing welfare culture and decrepit infrastructure has eroded our competitiveness, and we're being rapidly eclipsed by frugal and entrepreneurial Asians with shiny new airports and railways.
To some degree, the figures bear this out. Since comparisons with 1952 are all the rage this weekend, consider this: in 1952, the state pension was roughly equivalent to £36 a week in today's money. Today's pensioner gets £107 a week, plus winter fuel allowances, free bus passes and, for the over-75s, free television licences. So we're paying ourselves nearly three times more in real terms, and living longer as well. Surely that's got to be a recipe for ruin?
Yes and no. In real terms, GDP has risen faster than the population, so on a per-capita basis, we are much richer than we were when Elizabeth became queen and can, in some senses, afford such largesse. The tax burden relative to GDP is around the same as it was then, but the way it is spent has changed. Defence spending has shrunk drastically while that devoted to health, education and welfare has risen sharply. Inflation was three times as high then as it is now.
Government debt, thanks to the 2008 bank rescues, is also at similar levels to 1952. The big change is in private debt - by the end of 2011, consumer debt excluding mortgages was over £200bn. In 1952, household indebtedness was probably confined to tick at the corner shop.
Consumers are deleveraging only very slowly, and government debt is still rising. Only the corporate sector is flush, and it's this, rather than government spending, that holds the key to recovery. At some point, companies will have to start investing that money, or handing it back to shareholders. Only then can the economy really start to recover.
At least for investors, many things have improved since 1952. Fixed commissions for share dealing are long gone. And stamp duty these days is 0.5 per cent, a far cry from the 2 per cent levied in 1952. I wouldn't argue, as Harold Macmillan did later on in the 1950s, that "most of our people have never had it so good." But I would argue that there have been many times when we've had it far worse.
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