UK Government Debt - Putting it in perspective

HAMISH_MCTAVISH

Graham_Devon

What perspective is that then?

brit1234

HAMISH_MCTAVISH wrote: »

So you are basing this that because we had huge debts in WW1, WW2, Napolionic Wars, US Revolution, Wars with Spain, Holland and pretty much everyone else during these times at huge expense we should generate huge debts in peace time? Oh by the way Hamish our present debt is just the beginning, austerity hasn't really started and our deficit hasn't yet become close to being Neutralised so debt levels are going to increasingly soar.

Would you like me to extrapolate that alarming peace time steep rise?

oldvicar

Of course the graph doesn't include off-balance sheet liabilities, which are huge and have grown like topsy.

A good example today would be all those PFI hospitals

HAMISH_MCTAVISH

Graham_Devon wrote: »

What perspective is that then?

That there have only been three periods of between 20-35 years each during the last 320 years where debt has been lower than it is today.

Which does put the alarmist claptrap we hear about a "debt crisis" into perspective.

Unless you want to call the vast majority of the last three and a half centuries a "debt crisis" as well...

Graham_Devon

HAMISH_MCTAVISH wrote: »

That there have only been three periods of between 20-35 years each during the last 320 years where debt has been lower than it is today.

Which does put the alarmist claptrap we hear about a "debt crisis" into perspective.

Unless you want to call the vast majority of the last three and a half centuries a "debt crisis" as well...

In complete isolation, you have a point.

the_flying_pig

Graham_Devon wrote: »

In complete isolation, you have a point.

yeah, i mean, there are lots of reasons why the comparisons are imperfect [e.g when you beat someone in a war there's usually a way to suck a huge amount of the value of their economy out into yours as with the ww1 & ww2 german repayments] but it is certainly true that the history books of 100 years' time will view the current 'crisis' as a mere speck alongside the big wars and whatnot & that vastly bigger deficits have been tackled in the past.

Generali

HAMISH_MCTAVISH wrote: »

That there have only been three periods of between 20-35 years each during the last 320 years where debt has been lower than it is today.

Which does put the alarmist claptrap we hear about a "debt crisis" into perspective.

Unless you want to call the vast majority of the last three and a half centuries a "debt crisis" as well...

The big differences now are that debt is being run up without total war being fought and that the Government in peacetime spends vastly more than previously making it harder to service the debt.

The fact is that markets are refusing to lend to countries at far lower debt levels than was the case in the C19th or C20th. The UK might be able to buck the trend and borrow a few hundred percent of GDP but it would be wise not to stake too much on it.

To put it another way, if you're not prepared to lend to Spain or Italy at present, and there is money to be made if the market is wrong, why would you want your Government to put you into the same position?

vivatifosi

Out of interest, in the days before a truly international finance system, for a balance of payments who were we borrowing the money from? It sounds like we spent a lot of time at war with the other countries with money. (I'm hoping someone will save me the hassle of reading a huge Niall Ferguson tome to find out).

CLAPTON

Generali wrote: »

The big differences now are that debt is being run up without total war being fought and that the Government in peacetime spends vastly more than previously making it harder to service the debt.

The fact is that markets are refusing to lend to countries at far lower debt levels than was the case in the C19th or C20th. The UK might be able to buck the trend and borrow a few hundred percent of GDP but it would be wise not to stake too much on it.

To put it another way, if you're not prepared to lend to Spain or Italy at present, and there is money to be made if the market is wrong, why would you want your Government to put you into the same position?

we seem to be saying that there is no economic law that reasonably stops lending at higher levels than today.

the market is in fact lending to the UK at remarkably low interest rates rates

maybe the market doesn't like countries with no growth potential
or countries without control of their own economic policies
or countries without control of their money supply
or countries with endemic corruption and a low level of tax collection

Euroland was born is a sea of untruths
Virtually every country failed to meet the convergence criteria or lied about it or colluded in other countries lying about it.
And today it totally ignores its own rules and regulation without let or embarrassment.

So if we can have a credible growth policy then some modest extra borrowing may well be the safest course of action.

tightrs

a lot of the same people or should i say families that we borrow from today


Out of interest, in the days before a truly international finance system, for a balance of payments who were we borrowing the money from? It sounds like we spent a lot of time at war with the other countries with money. (I'm hoping someone will save me the hassle of reading a huge Niall Ferguson tome to find out).