UK 'must cut spending or raise taxes,' say experts

Rochdale_Pioneers

Wookster wrote: »

Its logical to prepare for the bad times in the good times. Crash has increased government debt in the good times which scuppers his ability to make the bad times smoother. Labour bankrupts Britain. Again!

Sorry but you are plain wrong. On any measure you choose to look at government debt decreased in the period 1997 - 2007. Those are the facts.

Generali

Rochdale_Pioneers wrote: »

Sorry but you are plain wrong. On any measure you choose to look at government debt decreased in the period 1997 - 2007. Those are the facts.

On any measure except the number of GBP that is owed as part of the national debt you mean.

National debt has decreased has a proportion of GDP and increased in nominal terms.

This is according to The Blue Book, produced by the Office for National Statistics on behalf of the UK Government.

The data series goes back to 1987 so the figures are directly comparable.

Wookster

Rochdale_Pioneers wrote: »

Sorry but you are plain wrong. On any measure you choose to look at government debt decreased in the period 1997 - 2007. Those are the facts.

Are you kidding?? Really??

So if I earn £50,000 in 1999 and owe £15,000 (30%) and then earn £100,000 in 2000 and owe £20,000 (20%) my debt levels have gone down?

Are you for real?

StevieJ

If they wish to cut public spending perhaps they should start here

http://news.bbc.co.uk/1/hi/england/sussex/7867412.stm

StevieJ

Wookster wrote: »

Are you kidding?? Really??

So if I earn £50,000 in 1999 and owe £15,000 (30%) and then earn £100,000 in 2000 and owe £20,000 (20%) my debt levels have gone down?

Are you for real?

Everything is relative, also if inflation has increased by 40% in that period, what would you say then ?

Wookster

StevieJ wrote: »

Everything is relative, also if inflation has increased by 40% in that period, what would you say then ?

I'd say you're screwed then, and probably taking lessons from Mugabe.

But we're not in that position are we and its disingenuous to talk about those sort of examples is it is plainly miles away from this reality.

tomstickland

Rochdale_Pioneers wrote: »

Its comparitive. If Labour mismanaged the economy by reducing debt, then by the same logic the Tories must have mismanaged it by hugely jacking up debt. Like I said earlier, logic has to cut both ways.

No, you have to judge relative to the conditions that they were dealing with.

tomstickland

Rochdale_Pioneers wrote: »

Sorry but you are plain wrong. On any measure you choose to look at government debt decreased in the period 1997 - 2007. Those are the facts.

As I said earlier in this thread, debt decreased from 1997-2003 (IIRC) and then it started going back up again.

StevieJ

Wookster wrote: »

I'd say you're screwed then, anbonus d probably taking lessons from Mugabe.

But we're not in that position are we and its disingenuous to talk about those sort of examples is it is plainly miles away from this reality.

So when looking at debt you don't consider the current purchasing power or NPV of that debt ? It could be the main bonus in mortgages in the future when inflation starts to take off. I thought in the original post RP was talking about the period 1997 -2007 not 1999 compared to 2000.

bubblesmoney

everyone agrees that the debt is going to increase now substantially with the past bailouts and probably more bailouts and nationalisations. this money to service the debt has to come from somewhere. most developed countries are coming out with substantial debt servicing needs.

for any debt (treasury bills) that need to be sold on the market, there are only two ways this can be done.

- either they get some buyers to buy the debts at a higher interest because many are now competing in the debt market for the same amount of limited funds. govts debt issuing capacity might be theoretically unlimited but the buying capacity in the market is definitely limited by the availibilty of funds.

- or they print money and service their own needs

in case of scenario 1 - the buying of govt treasury debt will suck limited money available (liquidity out of the system) so consequently all other investment will suffer a liquidity crunch and demand will fall. ie the housing crash will rapidly worsen, credit wont be available for any banks except govt owned banks (via further bailout money) and share owned banks will suffer badly, share prices of all companies on the share market will fall, stock market will collapse further, further companies will need bailouts or collapse, further job losses

in case of scenario 2 - printing money - will make currency fall (eventually), raising further debt from market will become more difficult, imports will become costly, exports can rise (hopefully) but with the world economy the way it is i dont see that as very likely

so moral of story as raising debt levels by most countries seems inevitable now, the shares etc will collapse in most developed countries, housing market will remain subdued / crash a lot further, more job losses on a larger scale.

the only way i feel to break the spiral is to treat the cause ie debt. stop taking a lot more debt, let companies that need to go bust go bust, dont bail out companies and consequently the debt doesnt come on to the govts books and share owners take the hit. either way the outlook is bad but this way the govts books look better and consequently the tax payer might be better placed in the longer run.