Our national debt

[larus]

Following on from someones insightful reply on the thread about Labour closing the Tories lead https://nortr3nixy.nimpr.uk/showthread.php?t=171736, I thought it would be useful to point out what is really happening with our national debt.

The comment was

"Yes, that's 80 billion, we don't need you to write out all the noughts! We also know that is supposed to be half the debt. 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!

(Made by Drew in response to a US post)

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Hers some figures from t'internet.

From figures published February 18th 2010, UK public sector net debt was £848.5 billion. (or 59.9% of National GDP) – Source: Office National Statistics

However, it is argued that UK’s national debt is actually a lot higher. This is because national debt should include pension contributions and private finance initiatives PFI which the government are obliged to pay.

The Centre for Policy Studies (at end of 2008) argues that the real national debt is actually £1,340 billion, which is 103.5 per cent of GDP. This figure includes all the public sector pension liabilities such as pensions, and Private Finance Initiative contracts e.t.c (Northern Rock liabilities).

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So, let's be perfectly clear about this. The National Debt is not going to half by 2014, the rate of INCREASE of the national debt is going to half (that's of course if you can trust Gordon 'No More Boom and Bust' Brown). Yep, we're getting more and more into debt all the time. That's a fact which I feel is being totally lost on the Labour supporters. We're screwed; no-one is even contemplating how we stop getting more in debt, much less pay it back.

 

[CHAPPERS]

At least we're not the USA hey?

 

[larus]

At least we're not the USA hey?

 

[strings]

Labour supporters

I don't think there are many of those around today, just people who are willing to put up with Brown for another five years because they don't think the Tories have put forward a credible alternative.

 

[larus]

Tories won't announce their policies as labour keep stealing them. May I ask what would it take for you to want to get rid of labour?

 

[Easy 10]

The figures are frightening. The annual interest alone is something in the region of £73bn, and thats on rock-bottom interest rates. If the UK's credit rating gets downgraded (a distinct possibility being as our national debt in relation to GDP is now worse than Greece's), then we're going to get royally humped by a massive hike in interest rates on that borrowing as well.

There's a catastrophe waiting for us somewhere down the line, whoever is in charge.

 

[strings]

Tories won't announce their policies as labour keep stealing them. May I ask what would it take for you to want to get rid of labour?

This is the thing. I don't like labour at the moment, but I don't think the Tories will do a much better job. The national debt is stupidly high, and I don't trust anyone who is currently in Westminster to get us out of the muddy waters we are in. The majority of them seem to be more preoccupied with claiming for their petunias to be trimmed and polical point scoring over party donors rather than actually improving the state of Britain.

You've made a bit of an assumption thats I am labour voter - I'm not, it is just that I don't really trust any of the major parties.

With regard to labour stealing the tories policies, they say imitation is the sincerest form of flattery

 

[Dandyman]

Following on from someones insightful reply on the thread about Labour closing the Tories lead https://nortr3nixy.nimpr.uk/showthread.php?t=171736, I thought it would be useful to point out what is really happening with our national debt.

The comment was

"Yes, that's 80 billion, we don't need you to write out all the noughts! We also know that is supposed to be half the debt. 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!

(Made by Drew in response to a US post)

------------------------

Hers some figures from t'internet.

From figures published February 18th 2010, UK public sector net debt was £848.5 billion. (or 59.9% of National GDP) – Source: Office National Statistics

However, it is argued that UK’s national debt is actually a lot higher. This is because national debt should include pension contributions and private finance initiatives PFI which the government are obliged to pay.

The Centre for Policy Studies (at end of 2008) argues that the real national debt is actually £1,340 billion, which is 103.5 per cent of GDP. This figure includes all the public sector pension liabilities such as pensions, and Private Finance Initiative contracts e.t.c (Northern Rock liabilities).

-------------------------

So, let's be perfectly clear about this. The National Debt is not going to half by 2014, the rate of INCREASE of the national debt is going to half (that's of course if you can trust Gordon 'No More Boom and Bust' Brown). Yep, we're getting more and more into debt all the time. That's a fact which I feel is being totally lost on the Labour supporters. We're screwed; no-one is even contemplating how we stop getting more in debt, much less pay it back.

I am happy to be corrected but was National debt not over 100% of GDP from 1918 to 1962 (98.15% in 1963)?

 

[Guy Fawkes]

The figures are frightening. The annual interest alone is something in the region of £73bn, and thats on rock-bottom interest rates. If the UK's credit rating gets downgraded (a distinct possibility being as our national debt in relation to GDP is now worse than Greece's), then we're going to get royally humped by a massive hike in interest rates on that borrowing as well.

There's a catastrophe waiting for us somewhere down the line, whoever is in charge.

Agreed

It just shows you just how meaningless politics has become in respect to promises politicans and parties will make, they are just arguing over where they will spend the few pence left over after covering that interest repayment.

It is part of the reason why despite a high tax burdon, we have to suffer poor road and rail systems, poorer health care systems etc compared to other countries, simply because there is no money left to invest in developing this countrry and its infrastructure.

Another frightening fact is that 52% of all jobs in the UK are in the Public sector, this means that taxes raised have to meet the majority of their wages, and that is before you take into account the other burdons on the state such as disability benefits, unemployment benefits etc etc so the state is responsible for keeping alot more people than th 52% figure.

What is there left in this country, what is our economy based on? where is the growth going to come from to expand our national income and GDP, a lot of our main companies are now in foreign ownership, very little is manufactured / produced in this country and is imported from abroad instead, meaning wealth is leaving this country (trade deficit- something you no longer here figures for)

This countries economy appears to be based on borrowing, both personal and Government. We have an economy whose foundations are built on sand rather than stone and the whole thing can collapse at any time.

Until the National debt is dramatically reduced, there is little scope for any polical party to make much of a difference, the worst thing any party that gets elected later this year can do is to continue with this policy of spending more than they get in through taxation. That policy may keep the public thinking that they are doing a good job, but it is ultimately damaging the long term future of this country and of future generations.

 

[Dandyman]

Agreed

It just shows you just how meaningless politics has become in respect to promises politicans and parties will make, they are just arguing over where they will spend the few pence left over after covering that interest repayment.

It is part of the reason why despite a high tax burdon, we have to suffer poor road and rail systems, poorer health care systems etc compared to other countries, simply because there is no money left to invest in developing this countrry and its infrastructure.

Another frightening fact is that 52% of all jobs in the UK are in the Public sector, this means that taxes raised have to meet the majority of their wages, and that is before you take into account the other burdons on the state such as disability benefits, unemployment benefits etc etc so the state is responsible for keeping alot more people than th 52% figure.

What is there left in this country, what is our economy based on? where is the growth going to come from to expand our national income and GDP, a lot of our main companies are now in foreign ownership, very little is manufactured / produced in this country and is imported from abroad instead, meaning wealth is leaving this country (trade deficit- something you no longer here figures for)

This countries economy appears to be based on borrowing, both personal and Government. We have an economy whose foundations are built on sand rather than stone and the whole thing can collapse at any time.

Until the National debt is dramatically reduced, there is little scope for any polical party to make much of a difference, the worst thing any party that gets elected later this year can do is to continue with this policy of spending more than they get in through taxation. That policy may keep the public thinking that they are doing a good job, but it is ultimately damaging the long term future of this country and of future generations.

Thank goodness we got rid of all that steel making, ship yards, coal mining, and other outdated industries back in the 1980s. Where on earth would we be now otherwise?

 

[Guy Fawkes]

Thank goodness we got rid of all that steel making, ship yards, coal mining, and other outdated industries back in the 1980s. Where on earth would we be now otherwise?

Yes - just think how much more Government money would have been wasted propping up those industries, and how much bigger the national debt would be. Although, I'm sure you would think that those industries would have thrived whilst trying to compete with places like China and their cheap labour costs thanks to Government handouts.

 

[larus]

You've made a bit of an assumption thats I am labour voter - I'm not, it is just that I don't really trust any of the major parties.

Apologies. I mis-read your post and read it as though you was a Labour supporter.

 

[Easy 10]

Another frightening fact is that 52% of all jobs in the UK are in the Public sector, this means that taxes raised have to meet the majority of their wages, and that is before you take into account the other burdons on the state such as disability benefits, unemployment benefits etc etc so the state is responsible for keeping alot more people than th 52% figure.

Yes, I saw that figure in the Telegraph yesterday.
When Labour came to power in 1997, public sector jobs accounted for around 31% of the market. "New Labour" has been responsible for a MASSIVE increase in numerous public sector penpushers and managers, particularly in the NHS. 52% is an absolutely shocking figure.

And as I see regularly in my line of work, the scale of the fees the NHS pay to headhunters and recruiters to place these managers is truley jawdropping. Well, sickening is perhaps the word.

 

[Dandyman]

Yes - just think how much more Government money would have been wasted propping up those industries, and how much bigger the national debt would be. Although, I'm sure you would think that those industries would have thrived whilst trying to compete with places like China and their cheap labour costs thanks to Government handouts.

All those industries suffered from a lack of long-term investment and may or may not have fallen to global capitalism. Although engineering and steel would both have benefited if for example there had been strategic investment in the railway infrastructure and if social house building had not come to a halt. Given the billions in subsidies used to bail out the banks it's hard to know if industrial subsidies would have been a better option or if it's simply a case of a long term failure to develop new and better ways of doing things.

 

[Mellor 3 Ward 4]

Another frightening fact is that 52% of all jobs in the UK are in the Public sector,

Frightening is not the word!!

 

[Superphil]

What I found frustrating was Brown telling us that he has now passed a law that this country contributes a percentage of GDP to international aid.

Now I just dont see how that is in anyway helpful to the citizens of the UK, if we didn't give away some 5bn a year to international aid, surely we would be able to speed our own recovery. At this rate we'll be asking for international aid.

The man is a laibility, like his predesessor, not that I really think Dave will do a lot better, but I really find the actions of the current govnt, unilateral and not in the interests of the people.

 

[larus]

Yes - just think how much more Government money would have been wasted propping up those industries, and how much bigger the national debt would be. Although, I'm sure you would think that those industries would have thrived whilst trying to compete with places like China and their cheap labour costs thanks to Government handouts.

That's the point which I feel as so often lost when people go on about the good old days of heavy industry. These industries collpased because we couldn't compete; either though out-dated working practices/unions, incompetent management, or cheap Labour from developing nations.

We have embraced the open/free maeket, yet we compete in a market where many other countries aren't open and free. For example, a company like BAE which is ruthless/unethical (but probably no more than similar companies in Europe/States/Far East), yet we criminalise it for fighting dirty to win foreign business and protect British skilled jobs. Sometimes we can be too 'British' for our own good.

 

[sten_super]

I am happy to be corrected but was National debt not over 100% of GDP from 1918 to 1962 (98.15% in 1963)?

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

The figures are frightening. The annual interest alone is something in the region of £73bn, and thats on rock-bottom interest rates. If the UK's credit rating gets downgraded (a distinct possibility being as our national debt in relation to GDP is now worse than Greece's), then we're going to get royally humped by a massive hike in interest rates on that borrowing as well.

There's a catastrophe waiting for us somewhere down the line, whoever is in charge.

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.

Another frightening fact is that 52% of all jobs in the UK are in the Public sector, this means that taxes raised have to meet the majority of their wages, and that is before you take into account the other burdons on the state such as disability benefits, unemployment benefits etc etc so the state is responsible for keeping alot more people than th 52% figure.

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%.

What is there left in this country, what is our economy based on? where is the growth going to come from to expand our national income and GDP, a lot of our main companies are now in foreign ownership, very little is manufactured / produced in this country and is imported from abroad instead, meaning wealth is leaving this country (trade deficit- something you no longer here figures for).

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.

 

[Easy 10]

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%.

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% !!

 

[drew]

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.