Economic Collapse is Now Inevitable
Economic collapse is now inevitable, says Daniel Hannan in the Telegraph, and he identifies June 27th 2025 as the Ground Zero Day when the future became set in stone:
In backing away from his attempt to slow, however feebly, the rise in benefits spending, Sir Keir Starmer was signalling to the world that Labour would never bring Britain’s budget back into balance.
The storm might break in 2026 or 2027 or even later. Labour politicians will do everything in their power to postpone the reckoning. But debts are not just paper liabilities; they end up being recovered.
We have all just watched a hopeless and hapless PM throw away his majority and, with it, any hope of reform. And the bond vigilantes saw what we saw.
What were Labour’s rebels thinking? Their constituents will be hammered when the money runs out, when salaries and savings lose their value and imports become luxuries. They will be swept from office just as surely as were Greece’s socialist MPs after the euro crisis.
Do they even believe their own claims? Do they truly imagine that they are shielding the vulnerable? Do they picture themselves posed heroically over some wheelchair-bound child, fending off the ghost of Margaret Thatcher?
Hannan reserves his main incredulity for Labour’s backbenchers who are, in his view, apparently incapable of seeing the blindingly obvious but determined to hang on to their seats, with one working-age adult in 10 on benefits and 1,000 new PIP (Personal Independence Payments) applicants every day (that’s over a million in three years by the way):
What we are seeing is the lowest and most cynical short-termism from MPs who want to keep their seats. In parts of urban Britain, Labour’s election strategy involves distributing postal votes to welfare claimants along with the warnings that the Tories are coming for their benefits.
From a purely partisan point of view, it suits Labour MPs to have constituents who claim state handouts. Sure, handouts are debilitating for the recipients and burdensome for the contributors; but the politicians who arrange the transfer often get an electoral reward.
Despite that, Labour MPs are still ensuring their defeat:
What looms in the feverish fears of MPs is having to mount the stage in their local sports centre and make a concession speech.
Yet, paradoxically, they are making their defeat almost certain. The British state spends an unbelievable £52 billion a year on disability and incapacity benefits. According to the DWP, that figure will rise to £70 billion at today’s prices by the end of the present Parliament.
Labour backbenchers would rather pull the sky down on our heads than risk a bad local headline. Labour Whips, knowing that the only thing they have going for them is the split between the two Right-wing parties, will do anything to avoid a similar split on the Left.
Labour is thus incapable of reducing expenditure. If it could not stick to its commitments on reducing the winter fuel allowance, capping child benefit or slowing the rise in PIP, it is plainly not going to attempt a radical overhaul of benefits.
As Hannan points out, there’s an economic truism in the facts that:
- The more state benefits rise, the more taxes or borrowing must rise to pay for them, leaving less and less money for investment or growth
- The more available state benefits are, the more people will claim them, including both those already here and others from overseas anxious for a slice of the cake on Easy Street
He predicts a future like the one that crippled Greece, triggered by the bond markets turning on Britain as the “weakest wildebeest in the herd”, and the remorseless march to electoral oblivion Labour seems hell-bent on:
Starmer might manage to limp on until the next election, a prisoner of the 400 standard-issue big-government Labour MPs who want him to stick to the Corbynite policies on which he was elected party leader. Either way, Labour itself is finished. Last week will be remembered as the moment when its MPs took the decision to check out.
All we have to do now is sit back and wait. Worth reading in full.
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The welfare state is a continuation of war socialism by other means. Britain has never had a post war society. She has had a continuation of the warfare state without the combat but with the necessary financial cost.
The war socialism of whole-of-society management that the Great War enabled can only be continued in peacetime by something like the welfare state. The Labour government after the Great War didn’t last long enough to implement it. Even though at one of their party conferences they could go as far as debating the abolition of the monarchy.
Thatcher used North Sea oil revenue to perpetuate the welfare state. Now after 80 years of the war state, the wealth has all been used up, just as all of Britain’s wealth in the USA had to be liquidated to pay for the first two years of the Great War. There are no more assets to sell.
Please elaborate on the statement, “Thatcher used North Sea oil revenue to perpetuate the welfare state.”
In the latter years of Margaret Thatcher we had an unemployment problem and people turned to the Benefits system. Out of work benefits were a tedious claim so people claimed on the basis of sickness. Callers to local Benefits Offices were advised to “get a sick note.” And so an industry was born.
It certainly made funding it a lot easier than if we’d had no oil. In many ways it put off the inevitable rendezvous with reality.
It reduced what used to be called PSBR – Public Sector Borrowing Requirement – so the books could be balanced without shrinking the welfare state.
This was necessary as those who no longer had jobs when old industry closed and were untrainable, were transferred into the welfare system.
Government departments were moved out of London to the areas hit hardest by closure of old industry to provide non-productive make-work jobs… basically welfare.
Who said people from old industry were untrainable? This was just another excuse to get rid of industry. Anyone involved in engineering is capable of learning new skills.
The oil revenue helped fund the de-industrialisation. We were described as a post industrial society and that we must change to service industries. Ted Heath at the time criticized this approach because if we ‘do someone else’s laundry at some point they will do it themselves’, or words to that effect. There was no attempt to harness the skills within industry because the university educated elite considered the skills as non transferable and therefore obsolete, and so centuries of engineering skills either went abroad or simply vanished.
Oh there are plenty more assets to sell such as houses and cars – yours and mine. Another point i have been making since the start.
Interesting pint of view. I would say that the two big wars we fought enabled a communist style government to be (temporarily) imposed. But with the post war Atlee Communists taking power, they just saw that Churchill’s coalition had implemented communism, and that suited Labour just perfectly. And the Tories became, rapidl, blue socialists from about 1960 onwards. So the rest is communist British history.
It must be so disappointing for all those Tories. After 14 years of carefully managing the country’s finances and protecting the borderts, to see what has happened since the General Election – they must be, errrr not surprised.
And an economic collapse will kill people. Like it happened in some eastern block countries after the Berlin wall came down.
That’s the intention.
“The problem with socialism is that you eventually run out of other people’s money.” – Margaret Thatcher
It is indeed inevitable. It’s like the laws of physics – you may not like them but they don’t care about your feelings.
I lived in a socialist country for the 24 years of my life. The system does not work.
Capitalism is deeply flawed but manages to chug along with its boom and bust cycles. Socialism is bust and bust.
The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.
Not as easy as he thought, this running-a-country business, is it? Perhaps the Tories made a mess of it not because they were Evil and wanted people in wheelchairs to starve to death, but because it’s actually quite difficult?
Some might say it’s impossible, and that instead the people who make up the “country” (whatever that is) should just be left the f alone.
The Civil Service make sure it’s difficult. They have done everything they can to keep the borders open.
Short version of this rant: Parliament made a decision Hannan really disapproves of.
My Latin is unfortunately by far not good enough to make a matching version of timeo danae et done ferentes so Beware of so-called conservatives asking for radical overhauls
must do. I’m not familiar with details of the situation, however, I greatly distrust career politicians who think the solution to some problem must be be mean to others if it’s perfectly clear that they never had to work for a living themselves and will never have to.
Reality is that we cannot afford to have so many able bodied people, with what would have been considered minor ailments 100 years ago sitting on their asses at home whilst my taxes are missed away on their recklessness and workshy attitude. Force them into work.
Kindness is a dangerous emotion. It is killing g our economy and wiping out our people (immigration)
Well, how many of these people exist exactly, where does the number come from, and what amount of them is affordable (vs unaffordable) for which reasons? Further, how certain is it that there is actually both work for them and someone who’d be willing to employ them? For people to be forced into work, work must exist first. It’s not going to manifest itself in some magical way by making them starve to death or resort to criminal means to sustain themselves.
The state should not be in the business of providing work. It did not drive the Industrial Revolution and it should remove obstacles for it’s citizens so that they can prosper. “No government has the right to decide on the truth of scientific principles, nor to prescribe in any way the character of the questions investigated. Neither may a government determine the aesthetic value of artistic creations, nor limit the forms of literacy or artistic expression. Nor should it pronounce on the validity of economic, historic, religious, or philosophical doctrines. Instead it has a duty to its citizens to maintain the freedom, to let those citizens contribute to the further adventure and the development of the human race.” Richard Feynman “It was Thomas Edison (perhaps Tesla) who brought us electricity, not the Sierra Club. It was the Wright brothers who got us off the ground, not the Federal Aviation Administration. It was Henry Ford who ended the isolation of millions of Americans by making the automobile affordable, not Ralph Nader. Those who have helped the poor the most have not been those who have gone around loudly expressing ‘compassion’ for the poor, but those who found ways to make industry… Read more »
How about cancelling all this? Just a thought.
I don’t doubt these figures but it does confirm what I have been posting these last five years – the aim, the intention is to bankrupt the country. Anybody with any degree of fiscal competence could see that all of the above expenditure should be cancelled, it is neither necessary nor affordable. So why isn’t it stopped?
Isn’t bankrupting a country a socialist dream?
“The best way to destroy the capitalist system [is] to debauch the currency.”
Lenin
“Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about?”
Maurice Strong Billionaire elitist, primary power behind UN throne:
I was told of a case where a child came to school not wearing socks. It turned out that their druggie parents had sold the socks (amongst other things) to raise money to buy their drugs.
I am not trying to overload the metaphor but you could reasonably argue that the UK has been selling off our possessions to fund current expenditure on welfare. Now you can jiggle the remaining furniture around to hide the gaps where our possessions used to be – but eventually you will not be able to fool anybody any longer.
Perhaps Labour believe that bare feet are a fashion statement?
Bare feet is where Kneel wants to put us.
Economic collapse was always the intention, a point i have been making pretty much since the Scamdemic started.
Who gains then? Don’t we all lose with economic collapse?
There is always an elite, my friend…
And an economic collapse provide such a unique opportunity to introduce radical measures…
Can you imagine: everybody will be so poor that living on state handouts will be the only way to survive.
But only people loyal to the state will deserve the handouts!
That’s it.
No, TPTB will consolidate their gains and the plebs will effectively be reduced to slave status. Don’t forget…
“You will own nothing and be happy.”
“If we can effectively kill the national pride and patriotism of just one generation, we will have won that country. Therefore we must continue propaganda abroad to undermine the loyalty of citizens in general and of teen-agers in particular.”
Лаврентий Берия
“To produce a maximum of chaos in the culture of the enemy is our first most important step. Our fruits are grown in chaos, distrust, economic depression and scientific turmoil. At least a weary populace can seek peace only in our offered Communist State, at last only Communism can resolve the problems of the masses.”
Лаврентий Берия
They’re implementing the Cloward-Pivan strategy.
“The strategy aims to utilise “militant anti poverty groups” to facilitate a “political crisis” by overloading the welfare system via an increase in welfare claims, forcing the creation of a system of guaranteed minimum income and “redistributing income through the federal government”
In other words, Communism.
“Labour is finished” – another one of my predictions made shortly after Kneel’s win in 2024.
Well if you took the trouble to delve into the election results it was pretty obvious there was a lack of enthusiasm for Two Tier with only 20% of the electorate made worse when many people revealed they votes anti-Tory not for Labour.
Civil war is coming. This breakdown will usher it along more quickly. The punishment of the guilty will be extreme (as it tends to be in all civil disorders). A warning, not a call to arms.
“Sir Keir Starmer was signalling to the world that Labour would never bring Britain’s budget back into balance.”
It hasn’t been in balance since the Labour wreckers of 1945 created a Socialist economy which suffered a brief set-back under Thatcher but resumed course when she left Downing Street.
We swapped a functioning, industrial based economy for State control, a cradle-to-grave welfare state and “free” NHS, and have run up £2.8 trillion in debt to pay for that and buy stuff from China because we don’t know how to make stuff ourselves anymore.
9 million people get welfare – that’s about a third of the labour force, more are employed in non-wealth producing government work, and most others in “public services” whose input cost exceeds output value.
The only way that can be corrected is by economic collapse – bring hastened by Net Zero… so not long to wait.