The day of the bailiff is high. Official figures show that average household debt will soar over the next four years to a staggering Â£77,309, which is far higher than the previous projections of Â£66,291.
Reported in the Guardian, the Office for Budget Responsibility (OBR) has predicted that total household debt will increase by Â£303 billion before 2015 as the austerity measures bite and that this will be reflected in higher personal borrowing. This has led economists to say that public sector debt is being transferred to the individual.
The shadow chancellor, Ed Balls, said "George Osborne says the only thing that matters is getting government borrowing down. But while he is cutting further and faster than any other major country in the world, borrowing by hard-pressed families is now forecast to rise every year. And to make things harder still, George Osborne's VAT rise is looking like an own goal as it pushes up inflation which threatens higher interest rates for mortgages and household borrowing".
Paul Krugman, Nobel prize winner and blogger wrote "People have been digging into the details of the government forecast and finding that it relies on the assumption that household debt will rise to new heights relative to income. Why? Because the only way the economy can avoid taking a hit from government cuts is if private spending rises to fill the gap – and although you rarely hear the austerians admitting this, the only way that can happen is if people take on more debt".
This presumes that families will not meet the gap where possible by tightening their belts, most can to some degree or other. It is the families that are already living with their belts tightened to the last possible hole that will truly suffer. These will be the ones who will probably see families fall apart as the bailiffs knock at the door. In fact debt collection may be the only growth industry over the coming years, but not the sort if industry you can base an economic recovery on.
But at the end of the day, when you consider that most state spending is aimed at the poorest and most disadvantaged, is it any surprise that government cuts will then mainly hit the poorest and most disadvantaged?