Question about the defecit?

chris_m

JamesU wrote: »

What is SWHTF? Thanks.

I believe the polite translation is "the muck will hit the windmill"

kabayiri

I honestly don't think the wider public understand this notion of 160bn deficit this year.

I spoke to a work colleague who thinks we need to find 160bn and that's it, job done.

It's about time our investment in the banks started to pay back. Much of the debt increase has been due to the bank bailouts.

When you are looking for serious additional funds, those billions of banker bonuses suddenly look mighty attractive. Once our annual income matched our outgoings, I wouldn't complain about the bonus money flowing to the bankers in serious fashion again.

JamesU

chris_m wrote: »

I believe the polite translation is "the muck will hit the windmill"

Understood, silly me for not getting that first time around. Thanks.

JamesU

JamesU

kabayiri wrote: »

I honestly don't think the wider public understand this notion of 160bn deficit this year.

I spoke to a work colleague who thinks we need to find 160bn and that's it, job done.

It's about time our investment in the banks started to pay back. Much of the debt increase has been due to the bank bailouts.

When you are looking for serious additional funds, those billions of banker bonuses suddenly look mighty attractive. Once our annual income matched our outgoings, I wouldn't complain about the bonus money flowing to the bankers in serious fashion again.

Not surprised. The extent of the problem has not been clear enough. Hope you are right that we can extract sufficient revenue from the banks, cannot quantify it myself. My feeling is that CGT will go back up.

JamesU

StevieJ

JamesU wrote: »

Guess a starting point is to find out what a potential rise in NICs is expected to bring into the coffers each year.....

Drc, good thread, thanks.

JamesU:)

I think we all know that one, 6 billion sound reasonable?

mbga9pgf

Depends on how many choose to stay in the UK and how many SMEs close. I know a couple who are going to retire and close shop, said its pointless working if all the goverment are going to do is take the lot in VAT and NI contributions.

CLAPTON

Emy1501 wrote: »

Eu agreement is no EU country should have a budget deficit of more than 3%. Of course few countries are listening to that but we will have one of if not the largest. Most Euro countries are trying to bring theirs within the limit with 3 years we are only planning to halve in 4 years thats why the EU is saying labours plans are not good enough.

When it comes down it just like anyone the government can keep borrowing till noone will lend anymore and if it cant pay its debts it can go to the IMF or go bust. The government will rely on the markets believing they have a credible plan to keep being able to pay the debt and whilst they have one people will be happy to lend at a reasonable rate.

My understanding from what I have read is once your debt reaches 100% of GDP then as a country you cant grow or grow more than 1% and that I suspect would be the problem. Our debt will reach something like 90% of GDP by the end of next parliament and no party has a credible plan to stop it there and all three parties have a funding gap of about 30-40B which none are prepared to tell us how they will fill each year.

The belief simply is we are GB and therefore people will simply keep believing we will pay our debts what ever they are. Of course no party will tell us how they will do this and this is the worrying bit.

just for the record

the EU 3% only applies to members of the Euro

and there's no specific consequence of being 100% of GDP ..it's just another number with no real significance... after the second world war we had debts of over 200% of GDP and then we grew for 60 years.

Emy1501

CLAPTON wrote: »

just for the record

the EU 3% only applies to members of the Euro

and there's no specific consequence of being 100% of GDP ..it's just another number with no real significance... after the second world war we had debts of over 200% of GDP and then we grew for 60 years.

http://news.bbc.co.uk/1/hi/8572149.stm

mbga9pgf

CLAPTON wrote: »

just for the record

the EU 3% only applies to members of the Euro

and there's no specific consequence of being 100% of GDP ..it's just another number with no real significance... after the second world war we had debts of over 200% of GDP and then we grew for 60 years.

Very true. But we have afew problems today which we didnt have then.
From "The hidden Debt" By brooks newmark:

"The Government claims that Britain’s debt stands at an already shocking £805 billion, equivalent to 57.5% of GDP. This is a significant underestimate. In truth, Britain’s public debt is an astronomical £2.2 trillion, equivalent to 157.2% of GDP. This means that, in addition to grappling with the effects of the recession and credit crunch, every single British household is being hobbled by the ball and chain of public debt to the sum of £85,610"

These figures are edit post-credit crunch.

Entertainer

Absolutely truthfully, I would not buy UK gilts anymore. I consider an investment in property to be a better risk. The reality is that we have had a debt to GDP ratio of 40% or so (actually 30%-45%) for the last 30 years. Before that we had a period of 70% debt in the 70's but we had hyperinflation to devalue it at that time. The fact that in an instant it will now be around 80% of GDP for the foreseeable future is absolutely mind blowing, it makes every other political issue whether it be NHS spending, education spending, defence, tax credits, whatever, pale into insignificance. It is a measure of the incompetence and failure of so many, both rulers and ruled that we are in this situation.

You mustn't allow temporarily cheap money to give you the illusion of affordability of servicing the debt. All that is happening now is that the debt is being juggled by implausibly low interest rates.

The politicians are living in a fantasy land of unaffordable giveaways and the public are ignorantly playing along. Gordon Brown gleefully reeling off a list of public spending pledges- more police, education, health blah blah blah and feeling so smug with himself that he's got one over on David Cameron.

Nick Clegg raising a myriad of taxes by £17bn and then giving it away in a higher personal allowance that won’t even go to poorer people and nobody even wants (do you want it? Do you know anyone who does want it? I don't), instead of reducing the deficit. With all this ringfencing of "key" areas the cuts that will be required in non ringfenced departments are incredible- 20%. There is something nobody is considering- is it even possible to make cuts that large? Saying that something needs to be done doesn't mean that it's going to happen.

I don't know how long it will take for the public to wake up to the reality of this- it was moving this way with the Conservatives discussing the deficit last year then they started dropping in the polls and that was it. Perhaps the nation has to reach the verge of bankruptcy before the penny drops.