Politicians Don't Want Public to Know: Britain Faces Financial Armageddon

A year ago, the world reacted with astonishment as Iceland technically went bust. It seemed inconceivable that a modern democratic nation could have such parlous finances that only an emergency $6billion bail-out from the International Monetary Fund enabled its economy to keep functioning.
This week, we witnessed a similar crisis in the Middle East but on a far, far more dangerous scale, as Dubai effectively defaulted on £48billion of loans.
Unless its more prudent and oil-rich neighbour, Abu Dhabi, launches a rescue plan then Dubai - once a gilded monument to financial success - will effectively be insolvent.
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Which leads us to a haunting question: as the country in the world hardest hit by the credit crunch, with gross domestic product (GDP) projected to decline by almost five per cent in 2009, could Britain be next?
Let's think the unthinkable for a moment. These are the facts.
Even before the financial crisis, the British Government spent roughly £30billion more per year than it earned in tax revenues. This money, of course, had to be borrowed from international investors.
Today, the Government needs up to £200billion a year for at least the next three years in order to meet its spending commitments. But the Government's estimates invariably understate its true need, and they have to be continually revised upwards.
Before the crunch, total government debt stood at roughly 40 per cent of GDP. It is now around 60 per cent of GDP, but is projected to soar close to 100 per cent in the next few years. But again, that is not the full story.

The news is potentially so bad that politicians simply don't want the general public to know what's going on.
Given the scale of the crisis, what then do they propose? New Labour is non-committal, suggesting that cuts will be prudent, thoughtful and spare people's worst pain. The Conservatives have targeted around £7billion of spending cuts, but these won't happen immediately and are nothing like enough to rebalance the nation's books.
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