Four years ago, while making a documentary in Italy about the country’s debt-ridden economy, I was struck by an unusual phenomenon: Most of the people I met were childless.
Given this was the land of big families, mother worship and adored bambini, I was curious to know why.
One middle-class northern Italian in his early thirties explained that the economy was so precarious, couples felt having kids was too much of a risk.
Holding the purse strings: Chancellor Rishi Sunak does not have a bottomless well on which to draw
He despaired, he said, of being able to find stable employment so he could marry and settle down. The young man spoke of his individual sadness, but on a wider scale the collapsing birthrate in Italy is a sign of economic and social distress.
Why am I talking about this now? Because it implanted in my mind how discussing debt in trillions and billions is too abstract to sink in. Here though, was a very human, tangible manifestation of how people are hurt when an economy falls too far into debt. Our national finances are in better fettle than Italy, the most heavily indebted nation in Europe after Greece, but we are in danger of becoming far too complacent. And with our national debt at more than £2trillion, we literally cannot afford to be.
Rishi Sunak, the Chancellor, does not have a bottomless well on which to draw. He had no option but to throw taxpayers’ money at firms in the teeth of the crisis. The alternative would have been far worse.
With interest rates so low, the debt we are running up is not an immediate problem.
But when countries go broke, it is not pretty. The nearest we have come to it in post-war times was in 1976 when James Callaghan’s Labour government was forced to borrow $3.9billion from the International Monetary Fund to stabilise the pound, a loan that came with dollops of humiliation.
Nor is it a picnic when great cities hit the financial buffers, as New York did when it almost went bankrupt in 1976, an era when the air of menace and despair was captured in films like Dog Day Afternoon and Looking For Mr Goodbar.
The city was rescued by a group of financiers and businessmen led by Felix Rohatyn, the legendary Lazard banker, after the political class failed. A warning there for Sadiq Khan, the London Mayor, busy mismanaging our own capital.
In a nation like Argentina, Covid has made a dire situation even worse so that nearly half the population is in poverty, eking out an existence on less than $200 a month.
When economies fray, so does the fabric of society. Politics become unstable and governance is weakened. Nations become prey for ruthless financiers and vulture funds on the international money markets.
Young people cannot find work or get on the housing ladder, start families and build a stake in society. Older people are stripped of their pensions and the middle class are in terror for their savings. Banks become unsafe and trust breaks down.
Britain is a long way from this apocalyptic vision. Most of our debts are held by UK pension funds and the Bank of England and our credit rating is solid. We are fortunate not to be part of the Eurozone and can run our monetary and fiscal policies to suit our needs. Above all, Jeremy Corbyn is not in charge. However we criticise this Government, he would have been infinitely worse.
Unlike Argentina, the serial defaulter, the UK has the distinction of not having reneged on its obligations for more than a century. But we cannot let the largesse run out of hand, particularly when the world order is changing, with China powering back to growth and greater dominance.
Argentina was one of the world’s richest countries in the early 20th century. No nation is immune from the realities of debt.