credit and debt

getting out of debt the British way

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On 29th December 2006 the United Kingdom of Great Britain and Northern Ireland made her final repayments on loans from the United States of America and from Canada taken out in 1945. The loans were incurred, not as a direct result of paying for the second world war, but in contrast to the American and Canadian experience, being so close to the front line and fighting for so long across its Empire had left the British economy in tatters and close to bankruptcy.

In the aftermath of victory, the British elected a Labour government with a landslide margin, and on examining the books in more detail, the economist John Maynard Keynes was dispatched, cap in hand, to beg for money from our North American allies.

I think there are a number of lessons that can be learned from the British experience that can be applied to personal circumstances.

1. Don’t be afraid to ask for help (but maybe not money)�from friends. The British turned to their closest allies, the Americans and Canadians, despite the loss in national pride.
2. Look to make cutbacks wherever you can. Rationing didn’t end in Britain until 4th July 1954, fourteen years after it had begun and nearly nine years after the end of the war.
3. You can still have fun, just more frugally. By request of the International Olympic Committee, the host of the 1948 Olympic games was London. The city was being rebuilt so there was no Olympic village, instead, athletes were housed in schools, government buildings and military barracks. It was memorable for the outstanding performance of Dutch housewife Fanny Blankers-Koen.
4. If you truly believe in it, you can make it happen. The Labour government of 1945 is generally recognised as one of only two truly ground breaking governments of the twentieth century. Their most profound legacy is the National Health System, whose principles are ‘from each according to his ability to pay, to each according to his needs as a patient’.

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