National Debt - UK and World in general (split from Syria-chat)

Quote taken from the Syria Assad thread to split the topic & stuck in Brexit as I think it's particularly relevant to the future of our national debt :


Swim, we have had a national debt for hundreds of years and this is not the highest in relation to GDP in our history. You do have to look at % of GDP rather than actual values. It's not a good ratio at over 80% but we have that in common with many western economies since the crash. We are currently the fifth largest economy in the World. Other major economies also have major national debts as a % of their GDP. It's wasn't such a big issue until Brexit. Now yes I agree it's an issue, but for different reasons for that which you state. I think Brexit is a major risk to our ability to remain under 100% in the longer term. Particularly as we don't have a plan, particularly as sterling has been falling.

But with growth, with open markets, with innovation, stimulation of entrepreneurs, retention incentives of our service industry, encouragement of creativity, invention etc. ability to retain the value of those ideas, creations, inventions we should be able to create income from growth of tax receipts and employment etc. The problem is that we are shunning talent via closing the door on migration of labour. We are a service sector-focused nation. We need to nurture that and expand it.

Re: National Debt - UK and World in general (split from Syria-chat)

Indeed. The idea of suddenly relying on manufacturing and agriculture which will occupy the young since you have closed off immigration is so very far fetched. The idea of building enough factories to take the place of the financial/service income that will leave just doesn't compute.

But due to personal debt the govt has its hands tied as to interest rates. If they go up there will be a lot of personal financial hardship as well as a fall in consumer spending. Yet is interest rates don't go up in the near future international investment will conclude that it is better to invest abroad where rates of return are better.

It isn't an easy decision to make.

I can't comment on world national debt since it is a huge subject but I can comment on the personal debt situation in France...it is rare that people do the same volume of shopping as the UK. Only recently have there been more than one sale a year in shops. Items of furniture etc are expected to last years.
French national debt is very high. The reasons include the generous money allocated to regions and local authorities as a historical left over from years ago that, if lowered, would cause a national crisis. France is a far more centralised country than the UK. But it is an issue in the election this year.

Re: National Debt - UK and World in general (split from Syria-chat)

Hi

We obviously have very different views on this subject.

My take on it is this.

Some Countries have much higher National Debt than the UK, in this context National Debt is Government Debt.

The first issue is this.

Who does the Government owe it debt to?

Japanese National Debt is over 200%, but so what?

The debt is owned by the Japanese themselves, they are great savers, in no way shape or form are they dependant upon the International speculators, which the UK is.

The second is this.

Why are we borrowing?

If we are borrowing to fund investment that is fine, it makes sense.

Everybody does it, a new boiler for you house or double glazing to reduce fuel bills is good economic sense.

A company borrowing to build a new factory is also sensible.

I do not have a problem with either.

The problem is that the UK is not doing this, this is not why we are borrowing.

We are borrowing to fund a lifestyle we cannot afford.

We have a structural deficit, the Government spends more than it collects in Taxes and that money is not spent on investments, it is spent on day to day living.

Paying the bills in other words.

That way lies Wonga, much higher interest payments to no practical use.

I have to laugh when I read some posts.

I have paid for my State Pension is one such.

No you haven't, you have not paid for it, you have paid for some of it.

There are different ways of calculating how much of it you have paid for.

A reasonable average would be that you have paid for around 80% of it.

Instead of the triple lock guaranteeing annual increases, State Pensions should, in reality, be cut by 20%.

We are unique in Europe as regards Benefits, here in the UK they are paid out of General Taxation.

In other EU Countries they are funded by Individual Contributions.

You get what he have paid in with only a very basic safety net.

It is no wonder that we have so much immigration.

Money for nothing is a great attraction.