Compounding errors and debit interest

Well – good news on the home finances front; now that my offspring’s student loan cheque for this year has come through, I’ve been able to pinch it and pay off a chunk of my credit card debt. After all, she’s got a whole working life ahead, during which to pay off the debt, so why not? Plus, it’s not really her money to start with, so she probably won’t miss it much.

Actually, I made that up. Would I pull such a scurrilous trick? Well, that might depend whose example I was following.

I saw on the news yesterday that Gordon Brown has joined with Nicolas Sarkozy to propose a $10bn fund to help developing nations mitigate the impact of climate change measures. Laudable as that goal may be, the proposal does smack of what Mr Brown said as Chancellor ten years ago about writing off third world debt…

At the time, he derived huge political capital from the move, and yet by 2004 the tangible results hardly reflected the rhetoric:

“Zambia, which receives the maximum relief available under the scheme, still paid out £313m in 2003 – three times its combined education and health budgets of around £100m” – Third Sector website, 24/3/2004

As I say, the goals are laudable, but Mr Brown’s pronouncements on the world stage must surely ring hollow to an electorate which has seen him make so many generous gestures… with other people’s money. We’ve had his notorious and irreparable raid on the pension investments of millions of taxpayers, and of course more recently his massive programme of bail-outs and stakeholdings in UK banks, funded by the public purse. Whatever the policy imperatives, these mvoes have ensured that our children will shoulder a burden of debt throughout their economically active lives, and will finish with even worse pension prospects than the current generation.

Even this current proposal (to offset poorer countries’ climate change measures) has attracted criticism; according to the Ekklesia site here, the way the deal is structured may simply aggravate developing countries’ debt problems – while still allowing the funds to be used, for instance, to build coal-fired power stations. That sounds a lot like a lose-lose to me.