Our national debt

[sten_super]

The day Gordon Brown settled our fate - Telegraph

"The chief reason for this was reflected in last week's revelation that the public sector has become so grotesquely swollen by Mr Brown's 10-year spending spree that it accounts for 52 per cent of our economy, up from 36 per cent in just a decade."

Think I said 31% when it was 36%, but you get the drift.
There's been a 66% increase in the number of managers in the NHS in the last 10 years as well. 66% !!

I'd be very interested to see where their figures come from. As I said, employment share is around 33%, and output share (although an outdated figure from 2007) was 20%. I'm not denying that there's been a massive increase in the public sector, I'm just not sure it's quite as big as that editorial would have us believe!

 

[larus]

Have to say this is a bit scaremongering. We have always had a national debt and not one of the parties is suggesting that it is going to be eradicated. My understanding is that the targets are to rid us of the deficit created by the credit crunch.

But that's very different to what you posted in response to US's post. You posted "I would of thought someone in your line of work would be impressed with anyone that pays off half their mortgage in only 5 years!". That's very different to what you're now saying, and, also, total garbage.

Labour are proposing to half the amount of borrowing, which is structural, not to do with the Credit Crunch. The real shame is that what the country needs is to SLASH the BLOATED, INEFFECTIVE PUBLIC services.

There needs to be a wake-up call. We aren't a super-power. We can't afford the level of servies we would like. And yes, the rich will get better services, but this happens in every country; always has done, always will do (even socialist/communist countries).

Too many believe the crap that we can provide world-class health, world-class educations, world-class transport, world-class benefits for the wankers that don't want to graft.

 

[Guy Fawkes]

Where have you got this number from? The latest numbers I can find (July 2009) suggest it is more like 33%, although this is still pretty damned high! Once you take into account jobs in the private sector that are dependent upon public sector funding it probably is more like 50%.

It was reported in the press about a fortnight ago. The public sector accounted for 52 per cent of gross domestic product last year, up from just 40 per cent in 1997, according to figures from the Organisation for Economic Co-operation and Development (OECD).

Our economy is based on services. These are just as exportable as manufacturing goods; the lack of manufacturing is not a problem, although I'd agree that the trade balance is. One of the reasons that it's not followed so closely now is probably down to the fact that service imports/exports are much harder to measure.

But what happens when these foreign owned companies with no real links to the UK look abroad for cheaper labour, similar to what the banks have done with their call centres.

 

[Guy Fawkes]

This is a diagram that Krugman has used a couple of times recently;

The chance of the UK's credit rating being downgraded is actually pretty damned slim; it's not about the overall size of the debt, more about faith in the ability to pay it back. There's little doubt that Britain's economic capacity is significantly higher than Greece, and as a result we can sustain a higher debt level.

Using those figures, you need to look deeper at those figures to understand what was happening at those times of high public spending, and what the money was being spent on.

You had the Industrial revolution, where great investment was made in our infrastructure, building roads, ports, schools and hospitals etc, but on the back of economic growth and expansion of our economy.

The spell in the 1940's and 50's had the country at war, and the rebuilding of our towns and cities.

So what exactly is all the money exactly going on this time that will greatly benefit the long term future of this country? - Keeping foreign car companies in business a bit longer with their scrapage scheme? more public sector red tape and management to keep our economy uncompetative? (money has to come from somewhere to pay for them, so taxes, which makes it more expensive for business to operate in this country and more likely to chose a cheaper country abroad to base themselves)

What is our economy based on? - high house prices (allowing high personal borrowing to continue) and just how much more councils and the Government can squeeze out of normal people.

 

[Westdene Seagull]

But what happens when these foreign owned companies with no real links to the UK look abroad for cheaper labour, similar to what the banks have done with their call centres.

And as the banks found out - customers don't like non-UK call centres. Exactly why many of them have moved them back or are in the process of doing so. Sky did exactly the same.

 

[Guy Fawkes]

And as the banks found out - customers don't like non-UK call centres. Exactly why many of them have moved them back or are in the process of doing so. Sky did exactly the same.

Providing there is a choice, which there may not always be.

Also, if customers like to be served by people from their own country, just how exportable is that when our service industry is looking to make money abroad?

 

[Uncle Spielberg]

Labour toom over the strongest economy of any followiing party since the 2nd world war with debts of 6 billion. They oversaw the strongest global economic conditions ever and still managed to screw it up. Many people have brought the " nothing to do with us guv " mantra they trot out about the recession but they have madre huge cock ups along the way and frittered away tens of billions of pounds on civial servants, quango's, administrators and regulators

 

[Guy Fawkes]

Labour toom over the strongest economy of any followiing party since the 2nd world war with debts of 6 billion. They oversaw the strongest global economic conditions ever and still managed to screw it up. Many people have brought the " nothing to do with us guv " mantra they trot out about the recession but they have madre huge cock ups along the way and frittered away tens of billions of pounds on civial servants, quango's, administrators and regulators

Yep - so much for being prudent and saving for a rainy day.

And people want to vote them in for another term

Politicians live in a fantasy world where they have unlimited money to spend and fritter it away without though of the consequences for the long term, but are just interested in a) what they can get (expenses scandal), b)what they can do to make themselves look good (eg Baker) and c) what they can do to get re-elected for another term, - so no real long term policies incase they have lost power when their policies come good how is that in the countries best interest?.

 

[Brighton TID]

Could I just ask, who are we actually in debt to, some loan shark country.

Surely, as GREAT Britain we can just refuse to pay it back. No messing.

 

[Billy the Fish]

Could I just ask, who are we actually in debt to, some loan shark country.

Surely, as GREAT Britain we can just refuse to pay it back. No messing.

I was thinking about this the other day actually. Why doesn't EVERY counrty just say we're not going to pay out X amount of money every year to an orgainisation that most people haven't heard of. Just all get togeather and say that the world bank doesn't exist anymore and switch off all of their servers and write off everyone's debt. Most countries control armies, who's gonna stop you?

As a species are human beings actually stitching themselves up by having all this debt, which is really just numbers in a computer. There's enough resources in the world to ensure that every country has all the food, water and infastructure they would ever need.

Humans are still pretty stupid in that respect, the resources are there but we can't even think of a way for everybody to use them. If we still exist in 1000 years time I rekon people will look back on this age and think we're all retards.

 

[sten_super]

I was thinking about this the other day actually. Why doesn't EVERY counrty just say we're not going to pay out X amount of money every year to an orgainisation that most people haven't heard of. Just all get togeather and say that the world bank doesn't exist anymore and switch off all of their servers and write off everyone's debt. Most countries control armies, who's gonna stop you?

Unfortunately the money isn't owed to the world bank. It's owed to the big banks, pension funds, insurance companies, etc.

 

[Brighton TID]

I reckon right, that if the government decided to halt the defence capital budget for say 3 years, we would be sorted. Just pay all the defence workers their wages to keep them happy but don't let them buy any warships or develop nuclears and stuff.

 

[RexCathedra]

At the end of the Napoleonic Wars, the UK's debt was over 200% of GDP. Japan's is right around 200% now.

By comparison, the CIA and the OECD have the UK just under 60% or just under 70% and the US in the 40's or 50's..

The reckless Germans? Right around 70%, next to those mad spendthrift Canadians

List of countries by public debt - Wikipedia, the free encyclopedia

 

[looney]

Its not the size of the debt so much as the cost of financing it, hence why the credit rating becomes more important. We would be f***ed under a hung parliament and could be under labour imo. A flood of capital out of the country after the election could precipitate this faster than a lot of people think.

I may be scaremongering a bit here, thats my job on NSC, but Scaremongers quite often turn out to be right.

 

[User removed 4]

I would be interested to know if the £825 million aid package to india announced in 2008 is still in place,in our current dire straights it certainly shouldnt be , in fact even if we werent skint , what the f*** are we doing giving that sort of money to a country that can afford nuclear weapons and is part of the space race ? its lunacy, but then again labour have always been profligate with other peoples f***ing money.

 

[beorhthelm]

I was thinking about this the other day actually. Why doesn't EVERY counrty just say we're not going to pay out X amount of money every year to an orgainisation that most people haven't heard of.

and then when you want to borrow some money, who will lead it? anyway as said, the debt is owed largely to ourselfs (ironically). and China, since they are about the only people making stuff anymore.

A flood of capital out of the country after the election could precipitate this faster than a lot of people think.

I may be scaremongering a bit here, thats my job on NSC, but Scaremongers quite often turn out to be right.

yes, that is scaremongering. very little capital will leave (see above, its here for our own pensions, savings etc) and the real experts aren't particually interested in credit ratings. the major investors do their own research and know the UK as a massive sovereign nation will pay it back. at worse some might like to push a drop in rating so they can capitalise on larger profits.

 

[User removed 4]

edited

 

[User removed 4]

and then when you want to borrow some money, who will lead it? anyway as said, the debt is owed largely to ourselfs (ironically). and China, since they are about the only people making stuff anymore.



yes, that is scaremongering. very little capital will leave (see above, its here for our own pensions, savings etc) and the real experts aren't particually interested in credit ratings. the major investors do their own research and know the UK as a massive sovereign nation will pay it back. at worse some might like to push a drop in rating so they can capitalise on larger profits.

we will have to pay more to borrow money if we are downgraded, believe me .

 

[beorhthelm]

we will have to pay more to borrow money if we are downgraded, believe me .

i didnt say otherwise. but every time i see experts (ie Bank of x Head of European Ops ) on tv or in the paper, they all downplay the liklyhood of a downgrading (or even call into question the rating systems for nations that print their own money). but certain parts of the media are loving this idea that dropping from AAA to AA or whatever will bring about armageddon. when really its a realitivly small (albiet large number) increase in repayments.

 

[User removed 4]

i didnt say otherwise. but every time i see experts (ie Bank of x Head of European Ops ) on tv or in the paper, they all downplay the liklyhood of a downgrading (or even call into question the rating systems for nations that print their own money). but certain parts of the media are loving this idea that dropping from AAA to AA or whatever will bring about armageddon. when really its a realitivly small (albiet large number) increase in repayments.

we cant afford the repayments as it is.