How Will the National Debt be Paid Off?

treliac

I think Cameron's been reading my MSE posts!!

'It’s not government money, as Labour like to say.
It’s your money.'

as he said to his party today.

I have been telling them this.

iltisman

How about standing our military down and someone will invade us,then it becomes their problem.

brixham

speaking of that wasn't it only resently we paid off our debt for WW1 ?

Old_Slaphead

brixham wrote: »

speaking of that wasn't it only resently we paid off our debt for WW1 ?

Nope - it was the sequel WW2

*MF*

We haven't paid off the debts from WWl, nor it seems debts incurred after the Napoleonic wars ...

Looks like we've got form, lol!

Extracts:

And if it seems strange to the non-economist that WWII debts are still knocking around after 60 years, there are debts that predate the Napoleonic wars. Dr Leunig says the government is still paying out on these "consol" bonds, because it is better value for taxpayers to keep paying the 2.5% interest than to buy back the bonds.

And while the UK dutifully pays off its World War II debts, those from World War I remain resolutely unpaid. And are by no means trifling. In 1934, Britain owed the US $4.4bn of World War I debt (about £866m at 1934 exchange rates). Adjusted by the Retail Price Index, a typical measure of inflation, £866m would equate to £40bn now, and if adjusted by the growth of GDP, to about £225bn.

These loans remain in limbo. The UK Government's position is this: "Neither the debt owed to the United States by the UK nor the larger debts owed by other countries to the UK have been serviced since 1934, nor have they been written off."

From here:

http://news.bbc.co.uk/1/hi/magazine/4757181.stm

Rochdale_Pioneers

The banking shares owned by the government *should* return a fat profit. HMG has bought in at the bottom of the market on extremely preferential terms, so if we still have a banking industry on Earth after this then I expect a large revenue stream to materialise that way. The main problem is that at whatever price the shares are sold, some smartarses will say "you sold too early - 5 years later they're worth x"

gallygirl

Who's offering the best cash back credit cards at the mo? That would be a start. That's a couple of billion.

Ebay all the crap they've been given on official visits over the years. Plus all the art etc in the embassies. Another 50 million. At least.

£100 night out allowance for London, £20 meal allowance. Very doable, bearing in mind their subsidised canteens & bars. 2nd class train travel.

Only buy new planes, office equipment etc. if the company is on quidco. Gotta be a good few million.

Look after the millions and the billions will look after themselves :rotfl:

princeofpounds

Should the shares reach £2 which would value the whole group at then this would result in a valuation of the HMG shares at around £50bn which would be a profit of over £36bn. Pretty good I reckon.

I'm an equity analyst by profession, but I've got to admit I did not fully understand your method here...

I think you are forgetting that if the banks are found to be even more deficient in capital than so far assumed then even more shares will have to be issued, diluting those which HMG and everyone else owns pro rata.

The banking shares owned by the government *should* return a fat profit. HMG has bought in at the bottom of the market on extremely preferential terms, so if we still have a banking industry on Earth after this then I expect a large revenue stream to materialise that way.

Unfortunately nothing is so guaranteed. Even buying a bank for zero is not necessarily preferential if it needs to be recapitalised several times over.

For example, imagine a bank with 10$ loans, 9$ deposits and 1$ equity. We find out that 1$ loan goes bad. leaving a bank with zero equity capital. The govt nationalises it for zero.

Then 4$ more loans go bad. The government has a choice - fail to pay back the depositors whilst liquidating the bank, or recapitalise to the tune of 4$ more.

So a bank bought for 'nothing' has suddenly cost the govt its own original perceived value 4 times over.

Just an example obviously, and it's possible that they do make a return as debt valuations have already been quite trashed. I don't know the UKbanks well as I work with foreign stock markets. But it's key to realise things are not guaranteed.

Gorgeous_George

They could start by reducing the number of MPs in Westminster.

Having done a time and motion study, I reckon the private sector could do the same job better with 7 people - providing none of them are of child bearing age.

GG

Wookster

I don't think there is a credible plan at all. Labour totally fail to see the problem with debt, it is utterly inconceivable that Labour would ever run a budget surplus.

The cost cutting that would need to be undertaken to realise a budget surplus are enormous and probably undeliverable for many years.

Public finances are in a real really desperate pickle.