The UK debt.

Discussion in 'General Discussion' started by joe-90, 21 Oct 2011.

  1. Space cat

    Space cat

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    If I understand that correctly, when governments create extra money - as only they can legally do - it appears on some balance sheet as 'borrowed' money. That would certainly explain a lot. So, since we don't actually owe the money to anybody, does this mean we don't have to pay any interest? :) :) :) Or is there some perverse mechanism whereby we, the taxpayers, have to pay interest on it anyway :mad: :mad: :mad: - in which case who's getting it? :confused: :confused: :confused:

    On a slightly different note, for longer than I care to remember I've heard of "government borrowing". Now I think I understand this. When the government runs out of money they do what everybody else does and borrow it (from a bank?). The downside is that they have to pay interest and that comes out of our taxes. :( :( :(

    So, I think to myself, wouldn't it be better if the government managed to build up a surplus and then lend it. :idea: :idea: :idea: Taxes would be higher in the short term but then they would come down because of the interest the government was raking in on its loans. Could we even reach a position where the government was making so much money on loan interest that we wouldn't need to pay any taxes at all. :D :D :D

    The thing is, I've never, ever heard of "government lending". Is this because no government has ever managed to build up the necessary surplus? :rolleyes: :rolleyes: :rolleyes: Or is there a fatal flaw in the plan? :?: :?: :?:
     
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  3. joe-90

    joe-90

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    The bottom line with the figures I gave you is that each person in the UK needs to either: Have cuts of £1300 per year or pay £1300 in extra taxes.

    In round figures, every family must have cuts of £5,000 per year or pay that in extra taxes. Top start paying back what we owe we need to double that.

    You will have to pay £10,000 extra in tax for ever.
     
  4. krisdorey

    krisdorey

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    No, the government needs to spend £1300 less per year per capita (if you want to view it like that).

    Not every government expense is a direct cost allocated to populous.
     
  5. Norcon

    Norcon

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    http://www.debtbombshell.com/britains-budget-deficit.htm

    brown should be flogged daily.

    Who do we borrow all this money from...?
    http://www.debtbombshell.com/bond-market.htm
     
  6. joe-90

    joe-90

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    Can you expand on that Kris? We aren't economists in here, but we are working on it.
     
  7. joe-90

    joe-90

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    That's my line. :confused:
     
  8. Norcon

    Norcon

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    New Labour will forever be remembered as the government that doubled the national debt, from 40% of GDP in 1997 to 80% in 2014

    Well done bliar.
     
  9. Norcon

    Norcon

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    OK.
    Joe90 wrote.
    I agree. :mrgreen:
     
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  11. krisdorey

    krisdorey

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    The government adding to national debt is not necessarily directly attributable to the capita of the UK, for example the UK government could extend their national debt to aid a third party (i.e. country), with a promise of future investment (you may read this as a kickback). If it transpires then the repayment , and more, can come from someone else than the UK population.

    Someone asked about government lending, I live in Jersey and we are the only "nation" that would actually fulfil the Euro requirement, in that you must have a positive balance sheet in that you owe less then you lend. Of course that rule was bent upon the Euro inception as otherwise no-one would be able to join it.

    Of course the UK could just do quantative easing and produce a trillion pounds, as long as we then export absolutely everything and no import then you get away with it, but you must do this forever. The economy is only weakened by Q.E in one direction. (I think its import, its a very headache inducing discussion if you try).
     
  12. Norcon

    Norcon

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    We''ll never be competitive with exports as long as the eu has laws to encourage lazy people to work 30 hours a week maximum.
     
  13. enyam

    enyam

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    The country is not borrowing money it is printing it because we spend out more on the infrastructure of the country than what is collected in revenue.This is the defecit.No mention of debt in the Govenrment bull.
     
  14. Norcon

    Norcon

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    Printed money (QE) is the deficit?
    Can you explain that?
     
  15. krisdorey

    krisdorey

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    QE contributes to the deficit as it is a devaluation factor.

    Its not the original cause of the deficit though
     
  16. enyam

    enyam

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  17. Norcon

    Norcon

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    With all due respect but thats not an explanation.
     
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