Ultra-low interest rates led to a borrowing binge that created an artificial economic boom that most people thought was a legitimate, sustainable boom.
The privatization of the three largest banks led to a borrowing spree that led to disaster.
The risk of borrowing more than the chancellor initially planned may spook the bond markets and lead to a rise in borrowing costs.
But that could lead to a rise in borrowing costs for Germany and France, and a considerable rise in risk, too, something that neither country is currently prepared to accept, beyond a July 21 agreement to expand a bailout fund to 440 billion euros.
The reluctance to trim has stemmed from fears that a cut could trigger inflation and lead to a surfeit of borrowing, along with the mistakes that caused the current crisis in the first place.
Worse, on February 8th Moody's, a credit-rating agency, downgraded Riggs's debt, which could lead to a higher cost of borrowing.
After President Donald Trump's election in November 2016, bankers and investors predicted that pro-business policies would lead to a surge in corporate borrowing.
I am clear about this – a temporary cut in VAT, as we are proposing, would lead to a temporary rise in borrowing.
Today he told ITV's Daybreak programme: "I am clear about this – a temporary cut in VAT, as we are proposing, would lead to a temporary rise in borrowing.
"I'm clear about this, a temporary cut in VAT – as we're proposing – would lead to a temporary rise in borrowing; the point I was making yesterday was that if you can get growth going by cutting VAT, then, over time, you'll see, actually, borrowing fall.
