Moody's has just announced credit warnings on nine European countries including the UK. George Osborne will no doubt tell us that this justifies the governments massive austerity measures.
As I have argued previously, this is complete nonsense. The UK government is in a position to break this stranglehold imposed by the ratings agencies. Since the Lisbon Treaty allows Central banks to lend to "publicly-owned credit insitutions" (such as RBS), it is perfectly possible for the Bank of England to print all the money needed to pay off the entire national debt, and lend it to the government via RBS, who could then reimburse all the banks. The tax payer would then "owe" the money to the Bank of England, and if the money didn't get paid back, it would not be a problem.
Since much of the "money" that they banks"lent" was money that the banks did not have to lend (they just created it out of thin air), paying off the debt would just lead to the "money" disappearing in a puff of spoke.
Unlike the totally stupid Quantatitive Easing (another £50 billion announced on friday) and the hundreds of billions of euros that will no doubt be printed for the banks at the next feeding frenzy organised by the ECB for the 29th of February, paying off debt this way is not inflationary.
So why don't we do it? Because the banks will fight like wildcats to keep the gravy train on the rails. They make huge amounts of money from the interest payments that governements have to pay on debt - around 4.25% of total European GDP on the current figures. The system is clearly stupid and needs to be dismantled.