UK Debt Hits 100% of GDP, Highest Level Since 1960s
theguardian.com
theguardian.com
Edit:
> Considered by conventional macroeconomic metrics, the 1960s can claim to be one of the UK’s most economically successful decades. GDP growth averaged 3.5%, unemployment 2.7% and inflation 3.5%. Real disposable household income per head was 25% greater by the end of the 1960s than it was at the end of the 1950s. However, such figures fail to take account of the trajectory of developments over the course of the decade, which tended largely in a negative direction. As well as slowing growth in real disposable household incomes and the declining profitability of industry, this trajectory can also be seen with respect to inflation and unemployment. As can be seen in table 3, inflation and the unemployment rate began the decade at 1.0% and 2.1% respectively, but gradually ratcheted up with every stop-go cycle. By 1969 inflation was 5.4% and unemployment 3.5%, a post-war high.
From https://lordslibrary.parliament.uk/the-uk-economy-in-the-196...
https://en.wikipedia.org/wiki/List_of_bombings_during_the_Tr...
I just want some honesty and transparency. If you are going to let in migrants, do it transparently…
Even the Arab petro-states that literally scoop money from the ground haven't saved that much! (Highest is Saudi Arabia with $1 trillion.)
Edit: in case you're wondering, no, there's no catch: Singapore has ultra-modern infrastructure, great healthcare, and they're enviable in every way.
(yes, there is a bit of a catch, it turns out)
The catch is that a lot of the money comes from being a tax haven.
Luxembourg, Switzerland?
Given that debt cannot grow to infinity, something will give way one day.
How rich are the rich now compared to the 1960s?
Or we can look at the bigger picture. Countries vary a lot by their taxation rate, but it seems to have no correlation to their debt levels.
It seems that you can always spend a lot more than what you have in hand. The demand for public money is insatiable.
And look at the madness of housing benefit. The taxpayer tops up a low income person's rent. This is essentially taxpayer subsidy of landlords. No wonder a large number of MPs are landlords.
But i agree that govt is far too large.
"whatever you think the budget should or should not be is irrelevant."
Wow, that is an aggressive formulation. Most Western central banks are independent of their governments and don't routinely go on money-printing sprees. Given that with a larger debt, an ever rising portion of the budget goes towards interest payments, I certainly feel that the public debt is relevant for me. Money spent on interest cannot be spent on public goods which I and others would like to use.
In a market economy, we use money to organize and manage that. But if we print more money, that doesn't create any more stuff at all. If the government is printing more money, two things are happening: The government is buying more of the stuff that's being produced, and the price of stuff is going up (because there's more money chasing the same amount of stuff). That means that everybody who's not the government is getting less of the stuff.
Now, that can be fine, if the government is doing things with the stuff that are going to pay society back down the road. If not, though, the government is just using up more stuff, leaving everybody else with less stuff, and causing inflation into the bargain.
So the question is: What made up that debt of 100% of GDP? Was it good investments that are going to pay the UK back? Or was it just waste?
What exactly are you trying to say?
Government debt is a key part of making sure there's adequate money in the economy. Without adequate money to lubricate an economy, really bad things happen.
I can loan you $100, at 200% interest. We will expand the economy. Good for me and bad for you. If that is a net benefit at the end of the day remains to be seen.
Also, there is always day D+1, when benefits may turn into losses. But perhaps, on that day, the person who made the debt is going to be dead.
People are utterly reckless and clueless when it comes to money—they haven’t a clue about the value of a pound, and frankly, they couldn’t care less. But they really should. Look at the ones with money to burn—spending on new hair, fresh nails, and a new dress for every wedding, while their partners splash out on another weekend getaway. It’s all a lifestyle choice, no different from the one the Bank of England seems to be celebrating. Same vibe, same level of obliviousness.
Some people are terrible with money, in a way that bears no resemblance to the way a central bank deals with monetary policy and macroeconomics, so I really don’t understand why you posted this little rant.
Discussions of sovereign debts as if they were the same as debts owed by individuals are laughable.
The stated actions planned by Labour (generally impoverishing the populace and slowing the economy) will have the effect of increasing the notional indebtedness of the UK, not decreasing it.
Also Labour has a better track record on balancing the budget than the Tories.
Debt is not inherently good for an economy or country. It can be good if it is invested wisely with positive ROI exceeding the cost of borrowing. Borrowing for negative ROI obviously impoverishes the future for the benefit of today.
Well, that's not in evidence here. There is maybe one commenter total in this thread other than myself who is NOT commenting as if these are real debts, that cannot be paid off since "the UK is broke" and will somehow cause the UK to be bankrupted or harassed by debt collectors.
> It can be good if it is invested wisely with positive ROI exceeding the cost of borrowing. Borrowing for negative ROI obviously impoverishes the future for the benefit of today.
Even this is a misunderstanding of sovereign debt. The UK can pay off all its debts by tea time. The cost of borrowing can therefore be $0. The UK is choosing to make payments to debt-holders for various reasons but none of them are "we need the money to make investments and this is the only way to get it, making payments to debt-holders". The UK does not need to borrow in order to spend.
Yes, governments have many options to allow spending besides borrowing. they do have real downsides which are not negligible, which is why they are done less often. The ability to do something, like "pay off debt by tea time" doesn't mean it is consequence free.
There are governments that fund spending primarily by printing new currency, and you can see what some of those effects are.
The UK, which creates UK pounds, can pay off these UK pound debts any time it likes
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The most important currency a country have is trust, this would cost way more trust than money.