Off the sauce

Richard Herring isn't drinking, and it's keeping him awake at night

So I made some new year resolutions. And unlike most of you I have stuck to them.

The main one was to give up drinking alcohol for an, as yet, unspecified amount of time. I usually do this for January, but this year feel I want to go for longer. And an insane, yet increasingly influential part of my brain seems to think I should try and get through 2008 without booze passing my lips. You may call me a dreamer… and in binge drinking Britain I might well be the only one.

Is it just me, or is everyone crapulous?

Now don’t get me wrong, I love getting pissed. This isn’t some sanctimonious, holier-than-thou conversion to the Temperance movement. In any case I don’t think there is any Christian justification for giving up the sauce – no-one liked a drink more than Jesus (check out Matthew 11:19 if you need convincing) – the Catholics think He was such a dipsomaniac that His blood was made of the stuff.
I don’t think you should give up drinking, I am not going to try and convert you to anything, I just want to see what difference it will make to my life if I stop.

I don’t think I am an alcoholic, even if my mum worries that I might be, and feel I am safe as long as I have a friend who is on the piss more than I am. So maybe that’s just a matter of semantics (as Al Murray the pub landlord says, “We don’t call them alcoholics, we call them ‘Publican’s Friends’”) and I am concerned by the extent which liquor dominates my social life. Since the age of 13 , when my friends and I would sneak up Cheddar Gorge with bottles of sweet, fizzy, Woodpecker Cider (Hereford Lightning) I have been a regular suckler at the teat of Bacchus. Now as a stand up comedian I spend most of my nights working in pubs and as a writer have the opportunity to while away the day-time hours too (as Douglas Adams observed, “Why do writers spend all day in the pub? Because they can!”) On my nights off how do I unwind? Whatever I’m doing there is usually a drink or two involved and being my own boss if I get plastered on a Tuesday and want to stay in bed on Wednesday, I don’t give myself a hard time about it.

But the hangovers have been hitting harder over the last few years and I worry about the damage that I might be doing to my body. I have still been drinking like I am a 20 year old, but my 40 year old body finds it harder to repair itself and my 40 year old mind has suddenly realised that I am not immortal. Of course that doesn’t mean I have to give up completely, but I don’t really see the point of drinking a couple of drinks and then stopping. Surely getting drunk is the point. I would rather hang out with a teetotaller than a moderate drinker. They are the worse people on Earth. And I am including serial killers in this. I am very much an all or nothing kind of guy.

I see this as an experiment, in which I am my own slightly unwilling guinea pig. What effects would a year of abstinence have on my health, my productivity and my social life? Would my friends disown me? Would it make me too boring and self-conscious to have any kind of fun? Or is it ridiculous for me to undersell myself that much? Surely I am capable of being entertaining and relaxed without a belly full of Guinness. Aren’t I? I am very sober as I write this and am seriously wondering if I am boring the pants off you.

If only being boring could do that, because my major worry about twelve months off the Jesus Juice is what effect it will have on my sex life? Surely booze is the most important lubricant for any single man. Only by being blind drunk for the first month or so of seeing someone can help you overcome the embarrassment of all the horrendous things you are supposed to go through together. Sober sex must be awful – I imagine. How would anyone know? I will tell you if I find out. But prospects look bleak.

So nearly a month in, how do I feel? So far, so goodie goodie. I have lost over half a stone in weight (though have been eating properly and exercising daily, though of course, not drinking helps with both those endeavours), I am filled with a new found energy and productivity has increased about ten fold and I am experiencing the strange and forgotten emotion of contentment.

I am, it is true, socialising less (but then I think I was going out way too much before), but generally have still enjoyed myself when I have gone out, realising that as long as I myself am not self-conscious about the booze embargo, then no-one else really cares. I have been having some trouble sleeping, without the comforting knock out effect of being trolleyed, with my over-active mind whirring around with brilliant comedic ideas at 3am. I have also been having some horrific and vivid nightmares, perhaps a rebellion of my brain, aware that if it doesn't get booze soon it will no longer have the excuse for the abnegation of responsibility. So like the caretaker in a Scooby Doo show, it is creating nightmarish ghouls to try and frighten me off this healthy course and back into the bar.

There also seem to be a lot more hours in the day, proving the old adage that you don’t live longer if you don’t drink… it just feels like it.

With another tour on the horizon, I am almost certain that I will come crashing off the wagon before I next write for you, my dear New Statesman website patrons, but the voice at the back of my head is telling me to keep it up.

As long as I don’t have to stop taking heroin I think I will be fine.

Richard Herring began writing and performing comedy when he was 14. His career since Oxford has included a successful partnership with Stewart Lee and his hit one-man show Talking Cock
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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?