SIR – In a perfect world all borrowing would be for longterm capital projects.

Money for paying the bills would come out of taxation.

Unfortunately, politicians craving power have got into the habit of promising voters high levels of public services and low taxes, and borrowing from banks and markets by issuing bonds rather than raising taxes to pay their bills.

As a result, governments are now deep in debt, living hand to mouth and having to borrow to pay their bills and service their debt. This has spawned a usurious monster trading in government bonds demanding ever higher returns from over-indebted countries to cover a rising risk of default.

The answer to the problem is presented as economic growth. If the economy can grow faster than what you are paying to service your debt, all is well.

If not, you default and go broke. Growth chasing borrowing costs is like a person relying on a pay rise to pay next month’s bills. The success of an economy should be judged by the condition of the people. Lust for power and greed have combined to destroy the ability of economies to build the good society.

In a perfect world, tax and spend would be a good policy, borrow and spend, a bad one.

In the present eurozone crisis, you have to question: what is capitalism for?

PETER NIELSEN
Worcester