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Capo
Joined: 09 Sep 2007
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 Posted: Mon May 17, 2010 10:34 pm Post subject: What you didn't hear during the UK election |
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There was a lot of talk about cutting the government deficit which is currently around 12%.
And you may remember the grandmother, Mrs Duffy I believe, asked Gordon Brown about the Government Debt. He responded by saying he would take action to cut the deficit.
Cutting the deficit doesn't not cut Government debt, even if the deficit was cut to zero the debt would still rise because of interest requirements.
So just to let you know currently UK government Debt stands at �890 billion (or 62% of National GDP).
None of the 3 main parties addressed the issue of government debt, all of them were happy to stick the deficit line, because the reality is we need to be running masive fiscal surpluses to have a hope in hell of getting our debt mountain under control.
Don't be fooled by their word play. |
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chellovek
Joined: 29 Feb 2008
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| Posted: Mon May 17, 2010 10:55 pm Post subject: |
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The government has been in debt for well over a hundred years, and people have been waaaa-ing on and on about government debt since the Napoleonic Wars so far as I can tell.
The point with tackling the deficit is to reassure lenders that the UK is serious about restoring order to its finances and what-have-you. As such, when varous debts and papers fall due at a variety of future dates the government can roll-over the debt. The problem and the panic being faced is that to restore such future confidence apparently requires big cuts that could re-ignite economic shrinkage, which then starts a downward spiral. Hence all the wrangling over whether to cut now or later, but that if cuts aren't made then the government would only be able to borrow at punitive rates.
Or something. I haven't dusted off my notes in years. *mumble mumble* |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue May 18, 2010 12:36 am Post subject: |
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| I don't think they were engaging in word play. I think they were just being realistic. The kind of cuts that would be required to reduce the budget deficit are conceivable. The kind of cuts required to start seriously scaling back the nation's total debt would be political suicide. The British voting base won't allow them to take serious steps towards reducing the debt, so why should they bother talking about it? |
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Capo
Joined: 09 Sep 2007
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| Posted: Wed May 19, 2010 3:44 am Post subject: |
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| chellovek wrote: |
The government has been in debt for well over a hundred years, and people have been waaaa-ing on and on about government debt since the Napoleonic Wars so far as I can tell.
The point with tackling the deficit is to reassure lenders that the UK is serious about restoring order to its finances and what-have-you. As such, when varous debts and papers fall due at a variety of future dates the government can roll-over the debt. The problem and the panic being faced is that to restore such future confidence apparently requires big cuts that could re-ignite economic shrinkage, which then starts a downward spiral. Hence all the wrangling over whether to cut now or later, but that if cuts aren't made then the government would only be able to borrow at punitive rates.
Or something. I haven't dusted off my notes in years. *mumble mumble* |
So it doesn't concern you that in the space of a couple of years we went from of the lowest government debts as proportion to GDP to on of the highest? we were at around 20%..... |
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Capo
Joined: 09 Sep 2007
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| Posted: Wed May 19, 2010 4:00 am Post subject: |
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| Fox wrote: |
| I don't think they were engaging in word play. I think they were just being realistic. The kind of cuts that would be required to reduce the budget deficit are conceivable. The kind of cuts required to start seriously scaling back the nation's total debt would be political suicide. The British voting base won't allow them to take serious steps towards reducing the debt, so why should they bother talking about it? |
None of the talked about debt, but they lead the people to believe they were.
If you watched the debates they were falling over themselves to promise things to the elderly which are totally unaffordable at the best of times, just remember these people are living longer and are already a drain on the government coffers it was totally irresponsible but they all wanted to look like good guys.
Im waiting for someone to have the guts to say the NHS should no longer be free at the point of use. Subsidised for taxpayers and provision for emergency care is the realistic way to go, but no one dares do it. The longer it takes politicians to get real the more painful it will be in the future.
Then there is the EU we could realistically save around 40 billion pounds a year by leaving, plus be able to follow our national interests with regulations and trade agreements, which would be a major boost to the economy. For the people who say the reason to stay in the EU is that is because most of our trade is with them. I will say yes most of our trade is with them that doesn't have to stop by leaving the EU, we can still have a free trade agreement in the same way Norway and Switzerland do and this is what the British people voted for in the referendum all those years ago. Just yesterday the EU killed our hedge fund industry which nets around 20 billion pounds a year to the treasury, countless other casualties before this, when will people realise enough is enough? |
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chellovek
Joined: 29 Feb 2008
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| Posted: Wed May 19, 2010 4:18 am Post subject: |
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| Capo wrote: |
| chellovek wrote: |
The government has been in debt for well over a hundred years, and people have been waaaa-ing on and on about government debt since the Napoleonic Wars so far as I can tell.
The point with tackling the deficit is to reassure lenders that the UK is serious about restoring order to its finances and what-have-you. As such, when varous debts and papers fall due at a variety of future dates the government can roll-over the debt. The problem and the panic being faced is that to restore such future confidence apparently requires big cuts that could re-ignite economic shrinkage, which then starts a downward spiral. Hence all the wrangling over whether to cut now or later, but that if cuts aren't made then the government would only be able to borrow at punitive rates.
Or something. I haven't dusted off my notes in years. *mumble mumble* |
So it doesn't concern you that in the space of a couple of years we went from of the lowest government debts as proportion to GDP to on of the highest? we were at around 20%..... |
Yeah it does. 20%? Are you sure? I thought it was higher than that. What I'm saying is that the paying down of the total debt tends to matter less for some reason, so long as it is believed that the state can pay-up when the various bits of paper come due then people are happy to lend. As I said, since the Napoleonic Wars.....
Our problem now is...well everyone knows. Rapid increase in total debt, high deficit etc in such a short amount of time. |
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Capo
Joined: 09 Sep 2007
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| Posted: Wed May 19, 2010 4:48 am Post subject: |
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| chellovek wrote: |
| Capo wrote: |
| chellovek wrote: |
The government has been in debt for well over a hundred years, and people have been waaaa-ing on and on about government debt since the Napoleonic Wars so far as I can tell.
The point with tackling the deficit is to reassure lenders that the UK is serious about restoring order to its finances and what-have-you. As such, when varous debts and papers fall due at a variety of future dates the government can roll-over the debt. The problem and the panic being faced is that to restore such future confidence apparently requires big cuts that could re-ignite economic shrinkage, which then starts a downward spiral. Hence all the wrangling over whether to cut now or later, but that if cuts aren't made then the government would only be able to borrow at punitive rates.
Or something. I haven't dusted off my notes in years. *mumble mumble* |
So it doesn't concern you that in the space of a couple of years we went from of the lowest government debts as proportion to GDP to on of the highest? we were at around 20%..... |
Yeah it does. 20%? Are you sure? I thought it was higher than that. What I'm saying is that the paying down of the total debt tends to matter less for some reason, so long as it is believed that the state can pay-up when the various bits of paper come due then people are happy to lend. As I said, since the Napoleonic Wars.....
Our problem now is...well everyone knows. Rapid increase in total debt, high deficit etc in such a short amount of time. |
sorry an over statement.....
[img]http://www.statistics.gov.uk/images/charts/206.gif[/img]
As I understand it the purple dots exclude the cost of bailing out Northern Rock, Iceland, Bradford & Bingly, RBS and LLoyds. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Wed May 19, 2010 5:02 am Post subject: |
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| Nevermind gov't debt, the UK's total external debt is around 400% of GDP. The pound is in for a rough time... |
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Capo
Joined: 09 Sep 2007
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| Posted: Wed May 19, 2010 5:47 am Post subject: |
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| visitorq wrote: |
| Nevermind gov't debt, the UK's total external debt is around 400% of GDP. The pound is in for a rough time... |
I know 2009 it was around $150k per capita, but there are much worse out the luxenburg goes into the millions of dollars per capita. |
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