• What sort of politician gets elected when deficits cost money?
  • Interest rates are too high for political promises
  • UK politics is about to change, radically

Two weeks ago, I asked you a question: how will our political world change when politicians don’t get money for nothing and interest for free?

The premise was that rising interest rates mean the cost of government debt will have an impact on government-spending pledges and, thereby, political promises.

For example, if increasing spending on the NHS would cost 5p in interest for every pound spent, that adds a significant cost to the decision. Not next year or in the next electoral cycle, but today. It takes 5p away from other government spending.

This is a new challenge in the careers of today’s politicians because interest rates have been so low for so long. It changes political priorities and incentives.

So, what sort of politician gets elected with what sort of policies in such an environment?

Here’s what you told me:

Hi Nickolai,

In response to your message about what happens to politics when debt finally matters. Governments and politicians in general are going to have to have a better understanding of economics going forward, as so few of them know anything about it, which is a joke in itself.

In fact it should be compulsory learning once becoming a member of parliament. A politician must learn Behavioural Economics, and Bayesian Statistics for one year. Maybe Nigel Farage should raise this with politicians.

Politicians think they can just implement whatever is on their mind following some ideological persuasion (fixing a square shape into a circle) and tax people to high heaven because they think the money is there to do it. Ignoring the fact that people might not have money to hand over, or that the government has a large debt pile to manage, it all stinks of incompetence in parliament as it is.

They also forget that it is our money not theirs and a law should be made that carries a prison sentence for politicians who mishandle the tax system and public money – it may make them think twice.

I think economics can be made simpler and easier to understand, but it requires the tax system to be overhauled and made simpler so there are fewer loopholes to fiddle the system.

Also politicians need to start asking and discussing questions like, how they are going to achieve goals? What are the costs? Is it viable? What time period it will take?

A proper assessment which strangely they don’t think is important. That is why we end up with implementing stupid ideas like HS2.

All the best


If any of what you say were possible, communism would work… marginally better than it did. But there is just something inherent about the government’s inability to get such things right. So it should simply butt out and leave people to spend their money as they see fit. That is what an economically literate politician would conclude – that they’re too stupid to run an economy. As Margaret Thatcher’s intellectual mentor put it, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

This reader picked up on my quip:

“Money for nothing and interest for free” – pretty sure there is an early 80s Dire Straits song about this. Which is ironic as we, along with the hapless government, certainly are in Dire Straits.

There is another Dire Straits song, “Love over Gold,” and I think way too much has been put over gold. Mostly made up and elaborate financial instruments created to hide debt making it look like assets, and also steal wealth from the unborn.

What is my suggestion? The simplification of the equation. And by this I mean (and you have touched on) – inequity equals revolution. Always has and always will. Especially when the poor fall below the poverty line. Which is easy to do in an inflationary environment.

There will have to be a very unpleasant “rebalancing” of wealth from the tiny minority to the majority. And by this I do not mean the easy pickings – the middle class – I mean the super wealthy. And they won’t like it one bit.

It is no surprise to me that since Mr. Farage and many others ‘bank balling’ as I refer to it, the government stamped very hard on the throats of the bankers. Because the conduit whereby wealth is stashed is still largely owned by the banks – and if they position themselves as gatekeepers to this wealth, very powerful forces will come into play. And we all know the collection of nuts and bolts flying together in loose formation known as the Conservative party and very incentivised by these moneyed up players.

I even heard the government imploring people to “carry on using cash” last week, an implicit but indirect suggestion to not put all your eggs in one banker’s basket.

I am a huge fan of the bawdy and very English “Carry On” films. They also show a version of the country and economy of the day. A memorable one was ”Carry on at your convenience” centering on, among other things, strikes. I wonder what the latest Conservative efforts might be titled? “Carry on Cash”?

All the best


Revolutions are not good news for investors. Historically speaking, property investors are disproportionately likely to take a hit in the form of rent controls.

This would certainly be one way to redistribute large amounts of unequally distributed wealth from its greatest source (property) to the poor (because they rent). It also sounds like a lovely policy – until you see the state of property in places that use rent control:

The old saying is that with democracies (at least those as are currently implemented) the electorate end up with the leadership they deserve rather than that which they need…

To state the obvious, that is because the electorate en masse will rarely (if ever) vote for policies which are promoted up-front and which are unpopular for the short term… even though they may be vitally necessary.

(In today’s environment, the only chance that such unpopular policies might gain sufficient support from the electorate is where they would be driven by someone who exudes knowledge and common-sense and has that rare ability to communicate effectively… to give an example, someone of Nigel’s calibre.)

So… the sub-optimal outcome (at best) ends up with a ‘muddle-through’ scenario… and otherwise the day of reckoning is merely postponed.

However I greatly fear, that in the current circumstances, the chances even for a sub-optimal outcome are worryingly slender 🙁


Yes, but I would’ve thought the reckoning would arrive much sooner than it has. So it seems to have some sort of driving force behind it which we don’t understand. Perhaps drinking the Kool-Aid of welfare, bailouts, subsidies and stimulus cheques would help us understand why the party must be kept going as long as possible, at ever greater risk of collapse:

Hi Nick,

When politicians realize how important our national debt is, they will:

  1. Repeal all climate legislation (2008 and 2019 Acts and any in between), dismiss the Climate Change Committee, ignore current and future Carbon Budgets, remove all subsidies to wind and solar (if any) energy and end contracts which lose money for the public (citing an Emergency.) Plans to end gas boiler and petrol vehicle use will be halted and ULEZ disbanded;
  2. Coal mines will be reopened, tens of thousands of young and older people enabled to become miners using excellent equipment to ensure their jobs follow first class health and safety policies;
  3. Private and public companies will start to ‘frack’ under UK land (as well as proceed with drilling for new resources in the North Sea) and in the Atlantic also;
  4. With new revenue from trade and the boosted income of hundreds of thousands of people, the government will massively increase housebuilding on brownfield sites and the ‘green belt’ thus vastly increasing the stock of social housing and able to reduce housing benefits for those renting privately. The private housing sector will be encouraged to develop new towns and cities, sponsored by government investment in the requisite road and rail infrastructure;
  5. The civil service will be hugely reduced;
  6. Expensive quangos, other unelected advisory bodies and disruptive NGOs will be disbanded and the royal family will be asked to refrain from publicly commenting on any policy;
  7. Proportional representation will be introduced so people are not just voting for the least worst option;
  8. The government will discourage all ESG and DEI credit ratings where these have harmful effects on the profitability of companies and security of employees;
  9. The Bank of England will be told to stop copying the Fed and other US cultural initiatives and to start supporting the economic growth of the UK;
  10. All EU directives and statutes embedded in UK legislation will be removed including VAT, and corporation tax will be reduced in the next Budget by at least half.

These are some of the things that will happen when our government realizes what a mess we are in.

Kind regards


And when would that be? Never.

They’d rather inflate away or even default on the debt.

This reader says otherwise:

At the end of today’s F & F newsletter (16th August) you wrote,But if the central bank can successfully engineer high inflation and low interest rates, then the government budget can come under control again.”

You haven’t mentioned the economic and societal impact of that. The working population will demand higher wages and the non-working population will demand higher pensions and benefits to compensate for the loss of purchasing power. When the government refuses to pay higher pensions and benefits, or employers seek to prevent their costs rising, workers will strike, which we are starting to see with transport and medical workers. We will see 1970s-style strikes across huge swathes of the British economy. 

Keep up the good work.

Kind regards,


That’s what we are seeing already. And inflation has barely begun.

Until next time,

Nick Hubble
Editor, Fortune & Freedom