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Friday, 13 March 2009

Ponzi schemes

Jeff Randall has an amusing piece in Her Majesty's Telegraph about the similarities between Gordon Brown and Bernard Madoff, which is worth a read.

He explain the most obvious point that by increasing public sector spending at a relentless pace, often on worthless projects, Brown was able to sustain the illusion of GDP growth, while all the time, growth in the "real world" was actually stagnant or falling. Nevertheless the similarities are close.

Brown has been found out but his case doesn't come to court until next year.

2 comments:

harmonyfuture said...

I would have laughed had it not been uncomfortably close to the truth. Do we know this man is sane.
If you read this Alex I have asked the question elsewhere as to how much each person is liable for currently with a view to adding to it each time we get a Darling handout. I get a value between £18 - £35,000 currently, difficult to pin down. Cheers

Alex said...

As you say it is a hard question to answer, but I had a go at it in this video a few months back:

http://www.youtube.com/watch?v=7ax9ojC7AX4

The problem is that there are now many more theoretical liabilities of state controlled entities which are likely (but not guaranteed to be met out of their assets). There are also state pensions, which on an actiuarial basis amount to sevral trillion, buut this liability is passed from one generation to the next.

In a strict sense none of these are personal liabilities. You can simply walk away from your share by emigrating.