Napoleon is reported to have said we’re a “nation of shopkeepers.” Historians have interpreted this as meaning that, to the French, we were regarded as merchants and traders. It is how England was perceived to have amassed its wealth; from China and India in the east to the Americas in the west. If Napoleon did say it, then it was meant as more of a compliment than a slight.

200 years on and we’re not a nation of merchants and traders anymore: we’re just a nation of consumers.

Last week it was announced that retail sales were up a few per cent – this was remarked on in the press as a wholly positive thing.

How does this square with what we’re being told every day that incomes are declining, household budgets are being squeezed, and inflation is rising? It just doesn’t add up - and I’m not sure why ever rising retail sales are regarded as such a good thing for UK plc anyway. I get it that if there were a dramatic fall in spending, it could mean that we’re having an economic wobble - what bemuses me is where is all the money coming from?

Consumer debt is at record levels……..£200bn (excluding mortgages). Maybe it does make sense. After all, we’re not spending from income or earned money, we’re borrowing the money; we’re all borrowing more.

Has the growth since the crash all been achieved on the back of piles of debt? If so, we’ve not really grown at all then, we’ve just borrowed our way out of the recession. Perhaps that is why although GDP is rising, the economy feels flat.  

The problem is that debt must be paid back. What’s happening is like a company borrowing money ‘off balance sheet’ and looking strong because its cash balance is decent but then when the cash is gone – there’s a problem.

Weren’t we told the recession was caused by a credit bubble in the first place? It may have begun with subprime in the US, but our economy has been running on debt since credit controls were relaxed back in the 80’s. Globalization then just super fuelled this splurge.

Then there’s the strange invention of quantitative easing. And nobody really knows if this is even working. That’s another £435bn that has been pumped into banks and into the financial economy – where has this all gone?

Maybe it’s been used to fund the massive increase in personal debt and cause asset bubbles? This vid is one take on it, suggesting it has been totally ineffective.  https://www.youtube.com/watch?v=4l06RhFoLE4#action=share

The Government has been borrowing too and in a bigger way. National debt has more than doubled since the crash to a colossal £1.86tn.

If the economy has been growing for years now and employment is at a record high, why have we had to borrow like money is going out of fashion? Could it be that we’re not in as good a shape as we’re being told?

If UK plc were a company - massive debt, cash flow insolvent and flattish turnover - it would be in intensive care and in need of restructuring. Whose fault is this?

You can’t, in my opinion, blame the consumer.

Cheap money is the cause. If money is cheap, borrowers take advantage.

The cost of money is the responsibility of the notionally independent Bank of England. Rates haven’t moved since 2008, and I read last week that the markets don’t expect any rise until 2019. If the Bank were truly independent, perhaps it would have moved rates up by now, as the Federal Reserve has done in the US.

It hasn’t because in the background the politicians still exert Machiavellian control. They only care about being in and or remaining in power.  They would all have the political ground cut away from them if rates rose, there would be political upheaval but it would be truer to reality – and this is the last thing they actually want. Unless, like Theresa May, who thinks she is in a one-horse race and therefore doesn’t need to confront reality.   

What’s the solution? It’s about taking the politics out of politics and confronting reality - but how do we do that? Maybe it’s our political system, while we’re one of the oldest democracies, our system is ancient and adversarial – it’s hardly changed and it’s rotten for the economy.

Is It just a coincidence that most of the strong economies in the world have political systems that have been created and evolved in the modern era? Their politicians seem to have done a better job at running their economies than ours.

There’s nobody else to blame except politicians though; they’re the ones in control, and they always claim credit for anything good but run away from responsibility when things are going badly………..Strong And Stable or For The Many and Not The Few: take your pick… they’re all the same to me.

If interest rates rose, there would be consequences. Over-leveraged and weak businesses would fail, but this would allow new businesses to emerge and isn’t the renewal of our economy better than stagnation? Economies have cycles, they grow and decline and then grow again just like the circadian rhythm in all living beings. Debt would be more expensive for consumers too – would this be such a bad thing though if it stemmed the rise in personal debt?

While some may argue that this would have extreme consequences, it can’t be right either for debt to increase and increase: that’s just vanity over sanity. And that’s why if UK Plc were a company, its directors would be in hot water now and you wouldn’t want them to run your business…..would you?