There's a newish and very nasty drug out there. It's called Devil's Breath (or Scopolamine) and it is, according to everyone who talks or writes about it, "the scariest drug in the world". That's because one whiff of it turns people into zombies: they stay cogent to an outside view, but "their free will vanishes", along with their memory.
That's made it handy in the past for Cold War-era security services looking for confessions, but it's also made it a dream come true for criminals.
The drug comes from Colombia, where the US State Department reckons there are 50,000 Scopolamine "incidents" a year. But I gather it has now started to be used in Tokyo, where a few cocktail-swilling foreign fund managers have come round the next morning to find their credit cards rather more well used than usual.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
They've been taken to shops where they have been made to splurge hundreds of thousands of yen on easily resalable goods they didn't want and aren't going to seeany benefit from anyway. They can remember nothing.
So here's the question. Has something of this sort happened to George Osborne and David Cameron? Because they seem to have spent an awful lot of money and forgotten all about it.
The coalition took over promising a resolution to the UK's hideous financial problems. And to listen to the Tories talk today about their "rescue" of our economy, you might think they had offered something of the sort. But look at the numbers and you will see that it just isn't so.
Our underlying budget deficit is still 6% of GDP an overspend of £90bn year. And our total public debt? Around 80% of GDP, up from not much more than 60% in 2009.
Add to these one other vital number 36%. This is how much tax we currently raise in the UK as a percentage of GDP. And since the 1960s, it's almost always been between 34% and 36%. However high or low tax rates go, that's how much we raise. Anyone confused as to why should read Matthew Lynn on the end of London:tax people too much and they stop paying.
You'll be wondering how much more than that the state spends. The answer is depressing: around 45%. Taken together, these simple numbers tell us that everything we have heard from politicians this week is delusional. We keep being promised the 'good life', but the funds aren't there to pay for it.
We know that we can't raise more money via the tax system without serious growth (which we can't create in a deleveraging and ageing society see my interview with Bruce Stout).
And we know that there is no political appetite to make any serious cuts to existing spending. A quick skim throughthe manifestos tells us the opposite.So Britain's finances aren't fixed. They are, as Albert Edwards of Socit Gnrale puts it, "a ticking time bomb".
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
-
Inflation may be slipping but there is still plenty of misery aheadEditor's letter Inflation may be a little lower than last month as the prices of petrol and diesel fall back, but it remains structural and long-term, says Merryn Somerset Webb. And there are no painless solutions.
-
Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
The public may have reached its limit for tax risesEditor's letter The UK tax burden is now at a 70-year high. And, while there may be some reason to hold off on cuts right now, taxes are too high because the state tries to do too much. Perhaps it should do less, says Merryn Somerset Webb.
