Postpone some of the cuts?

wolvoman

LauraW10 wrote: »

I would just like to point out that GB only ever borrowed to invest in the UKs future and not to finance their everyday spending. This was intended to create growth.

Do you not believe in investing in the future ?

There's some truth in that. Improvements to transport, hospitals and schools do help.

However the extra million public sector workers are not future investment - they are an extra million salaries to be paid NOW.

So you're half right.

IronWolf

Sir_Humphrey wrote: »

Stiglitz is not a behavioural economist, and the debt to GDP ratio is nowhere near 150%

Our current debt includes interventions, so our debt is 154.9% of GDP.

Generali

Sir_Humphrey wrote: »

Stiglitz is not a behavioural economist, and the debt to GDP ratio is nowhere near 150%

He won his Nobel prize for his work on asymmetry of information. That's a part of behavioral economics.

StevieJ

IronWolf wrote: »

Our current debt includes interventions, so our debt is 154.9% of GDP.

If you wish to include the debts of organisations that will be floated at a profit in the not to distant future, at which point the debt will disappear in a flash that is up to you, not entirely structural is it.:) I prefer to deal in the spirit of the truth and not try to embellish for the sake of political one-upmanship.;)

IronWolf

StevieJ wrote: »

If you wish to include the debts of organisations that will be floated at a profit in the not to distant future, at which point the debt will disappear in a flash that is up to you, not entirely structural is it.:) I prefer to deal in the spirit of the truth and not try to embellish for the sake of political one-upmanship.;)

Its not embellishment, its literally our debt at the moment. Until we recover the money we still pay interest on it. And there is always the possitibility that it all goes under and we don't recover it.

For example, I could take out a £10k loan and put it in a savings account. My debt is still £10k, even though i can pay it off anytime instantly.

StevieJ

IronWolf wrote: »

Its not embellishment, its literally our debt at the moment. Until we recover the money we still pay interest on it. And there is always the possitibility that it all goes under and we don't recover it.

For example, I could take out a £10k loan and put it in a savings account. My debt is still £10k, even though i can pay it off anytime instantly.

We don't pay interest, the banks pay interest out of their profits. BTW the figures only include debts and not assets, as I said disingenuous.

IronWolf

StevieJ wrote: »

We don't pay interest, the banks pay interest out of their profits. BTW the figures only include debts and not assets, as I said disingenuous.

Debt figures never include assets, and the assets of the UK government go way beyond the banks anyway.

Generali

IronWolf wrote: »

Debt figures never include assets, and the assets of the UK government go way beyond the banks anyway.

I think where Steviej is going with this is that if you look at a bank's balance sheet it will have assets (loans) and liabilities (deposits). If you subtract the value of the assets from the loans you end up with equity, that is the 'net value' of the bank.

If a bank is nationalised, the liabilities are all added to the National Debt but the assets aren't accounted for although they still exist and are now owned by the Government (your mortgage/credit card debt wasn't forgiven when Northern Rock was nationalised).

While strictly speaking you are right to include the liabilities of the nationalised banks in the National Debt, the reality of the situation is that there are assets behind those liabilities that aren't being shown.

Of course, while on the subject of things being unaccounted for in the books of the Government, the state and civil service pensions are liabilities that the Government doesn't account for, rather worryingly because they say that they can just renegue on the promise to pay. Those liabilities are vastly bigger than the liabilities of the banks.

IronWolf

Generali wrote: »

I think where Steviej is going with this is that if you look at a bank's balance sheet it will have assets (loans) and liabilities (deposits). If you subtract the value of the assets from the loans you end up with equity, that is the 'net value' of the bank.

If a bank is nationalised, the liabilities are all added to the National Debt but the assets aren't accounted for although they still exist and are now owned by the Government (your mortgage/credit card debt wasn't forgiven when Northern Rock was nationalised).

While strictly speaking you are right to include the liabilities of the nationalised banks in the National Debt, the reality of the situation is that there are assets behind those liabilities that aren't being shown.

Of course, while on the subject of things being unaccounted for in the books of the Government, the state and civil service pensions are liabilities that the Government doesn't account for, rather worryingly because they say that they can just renegue on the promise to pay. Those liabilities are vastly bigger than the liabilities of the banks.

Wait one sec, the graph actually says net debt, rather than debt. So does net not mean the same things for nations as it does for businesses?

abaxas

Why do people hate democracy so much?

Any reliance on outside funding lowers the ability of the government to make it's own decisions. Ie they are more and more controlled by those who are lending them the money. Do we really want this to happen?