Economics

Despite 'the age of austerity', Britain still has a debt problem. That’s the conclusion of a new report from the Centre for Social Justice. It suggests that personal debt in the UK has reached a record high of £1.4 trillion, or 90 per cent of the UK's economic output last year. That’s not happened overnight; but the debt level has increased steadily over the last decade: Breaking this down, the CSJ says that the average household debt is now £54,000 (nearly double what it was a decade ago). Thanks to the increase in borrowing, 5,000 people were made homeless last year due to mortgage and rent arrears.

It takes a lot to make the subject of immigration respectable for liberals, at least if you’re pointing out its problematic aspects. But Paul Collier, an Oxford economist specialising in the world’s bottom billion, has, in the 270-odd pages of his new book Exodus, opened up the issue for the left — well, for all comers, actually. Which, for a book suggesting among other things that, left to itself, there is no natural limit to immigration, is quite something. ‘The overwhelming reaction I’ve had,’ he told me, from his Oxford berth at the Centre for the Study of African Economies, ‘is that people thank me for making the subject discussable.

The maths of America’s financial problems are fairly simple. Every year the federal government spends more than it brings in so must borrow to fill the gap. This is fine when you’re young and healthy, with great prospects and you are borrowing to invest. But one day your lenders look at you and realise you’re not young and growing any more. You’re middle-aged and knackered. You are borrowing simply to spend and time is running out for you to pay back your debts. It’s an ugly moment for anyone, especially the most powerful country in the world. There are economists like Paul Krugman who argue that America is not like a household or a person. It can borrow and invest in ways unique to sovereign powers. Countries do not simply age and die.

The latest adaptation of one of Trainspotting author Irvine Welsh's books is Filth  - a film so filthy that Deborah Ross had to ‘endure’ the film ‘from behind her hands’. But, somewhere amongst the ‘enduring’, she became ‘strangely hooked’, as Bruce Robertson (aka James McAvoy) led her through Edinburgh’s ‘dark underbelly of general horridness’. Filth may be ‘ghastly and unpleasant, but also kind of brilliant’, says Ross. Here’s the trailer: Breaking Bad started off with mixed reviews and an ‘uncertain future’, as it ‘dumbfounded viewers and critics alike’ – at least according to the economics professor Steffen Huck.

Two years ago, the West thought it recognised what was happening in the Arab world: people wanted democracy, and were having revolutions to make that point. Now, recent events in Egypt have left many open-mouthed. Why should the generals be welcomed back? Why should the same crowds who gathered in Tahrir Square to protest against the old regime reconvene to cheer the deposing of their elected president? Could it be that the Arab Spring was about something else entirely? I believe so. The Arab Spring was a massive economic protest: a demand that the poor should have the basic rights to buy, sell and make their way in the world.

The Labour years can, in retrospect, be seen as a massive experiment into the link between cash and education. Gordon Brown almost doubled spending per pupil over the past decade, the biggest money injection in the history of state schooling. But as he did so, England hurtled down the international league tables. It now languishes in 18th place, according to the Organisation for Economic Co-operation and Development (OECD). The plan didn’t work. Only now is the full cost of that failure becoming clear. In an age when ‘work’ is increasingly something done with the head rather than the hands, education standards determine the wealth of nations. There is now enough data to draw a direct relationship between the two and put a price on it. Smarter nations are richer nations.

The latest figures for NewBuy, one of George Osborne’s prop-up-the-housing-market schemes, have been published. Mercifully, perhaps, they continue to be underwhelming. To recap: inspired by the American success story of providing mortgages to those that can’t afford them, the scheme provides a guarantee backed by the government and house-builders (who commit 5.5 and 3.5 per cent of the purchase price of a property, respectively) to lenders. Buyers put in a deposit of 5-10 per cent, but the extra money means they can get a higher loan-to-value mortgage than they could otherwise afford. Houses have to be newly built and costing £500,000 or less. It has to be the buyer’s main residence. The Chancellor made available funds to support up to 100,000 mortgages.