National debt going up £5000 per second

wotsthat

fordcapri2000 wrote: »

When I write something like that I personally am just looking at this site for a short while then shooting off to work.. Like most people we just round numbers up/down and just give a ball park figure.

I'm impressed that you tried to multiply 5000 x 60 x 5 in your head before shooting off to work.

The way to do is though is to put the zeros to one side >>>>0000

Multiply 5 x 6 x 5 = 30 x 5 = 150

Put the 4 zeros back on = 1,500,000

As per Gen's post the multiplication includes a multiple of 3 (60) so the digits in the final answer when added must be divisible by 3 i.e. 1 + 5 = 6.

This is the wrong place to post maths in a rush. Next time maybe it would be better to have an idea for a thread but post it the next day - the national debt wouldn't have gone anywhere if you'd delayed by 24 hours.

As you know there are an awful lot of scared indebted householders on this board so we're hardly going to be starting threads about this in the meantime whilst you ponder the best way to give everyone a reality check.

downshifter98

Shouldn't we also have a number that increases as GDP increases? Debt as a percentage of GDP seems more relevant to me. I think it's about 80% of annual GDP so similar to someone earning £30t pa and owing a total of £24t at an interest rate of sub 1% from a credit card company that are unlikely to ever want the principle repaid - sounds pretty good to me. Once the yearly deficit is removed (we are slowly getting there) the debt will slowly reduce as a percentage of GDP.

Having said all that I find it funny with all of these calls for the end to austerity - most people wouldn't recognise true austerity if it hit them in the face unless it included cancelling Sky TV, eating out, holidaying abroad and only owning one car, one house etc.

antrobus

Cyberman60 wrote: »

Not true. The debt is financed by the interest on the debt being paid. The total National Debt will never be repaid. :eek:

I think you will find that, as a general rule, UK government gilts actually have a maturity date. If it has a maturity date then the debt will be repaid on the maturity date. Failure to do so would be regarded as a default, which is generally regarded as a Bad Thing.

P.S. I would have said ALL of UK government debt has a maturity date, but I'm not 100% sure that we've paid off all the undated stuff. I know that War Loan has just been repaid; but I can't remember whether there is any other old carp hanging around.

antrobus

downshifter98 wrote: »

Shouldn't we also have a number that increases as GDP increases? Debt as a percentage of GDP seems more relevant to me. I think it's about 80% of annual GDP so similar to someone earning £30t pa and owing a total of £24t at an interest rate of sub 1% from a credit card company that are unlikely to ever want the principle repaid - sounds pretty good to me. Once the yearly deficit is removed (we are slowly getting there) the debt will slowly reduce as a percentage of GDP. ....

Basically, yes. Although I'd guess the figure is more like 90% of GDP by now.

Removing the annual deficit entirely would certainly speed up the reduction in the debt/GDP ratio, but at the very least what you need to do is reduce the deficit to the level where debt is growing at a lower rate than GDP.

downshifter98 wrote: »

...Having said all that I find it funny with all of these calls for the end to austerity - most people wouldn't recognise true austerity if it hit them in the face unless it included cancelling Sky TV, eating out, holidaying abroad and only owning one car, one house etc.

The 'austerity' we have 'suffered' in the UK is quite mild compared to the kind of austerity experienced in Ireland or Spain for example.

HAMISH_MCTAVISH

antrobus wrote: »

P.S. I would have said ALL of UK government debt has a maturity date, but I'm not 100% sure that we've paid off all the undated stuff. I know that War Loan has just been repaid; but I can't remember whether there is any other old carp hanging around.

AIUI the last of it will be repaid in July 2015.

Generali

From my very rough calculations, GDP is increasing at about £1500 per second.

Lest we forget the biggest owner of UK debt by a huge margin is.....the UK Government!

wotsthat

antrobus wrote: »

The national debt is always repaid. Granted it's normally repaid by simply borrowing some more money from someone else, but it is always repaid. That is why nations find it such a problem when they find that no one will lend them any more.

Yes, maybe I should have been more precise and suggested the size of the national debt isn't very likely to ever reduce rather than never be repaid.

I think it amounts to the same thing but best to be absolutely clear

HAMISH_MCTAVISH

Generali wrote: »

Lest we forget the biggest owner of UK debt by a huge margin is.....the UK Government!

Quite.

And to be honest, the vast majority of UK debt is owned by UK entities.

We basically owe 70% of it to ourselves.

From memory, roughly 25% is owned by the BOE, which is of course just another arm of the UK state.

Around 20% is owned by UK pension and insurance companies, and 5% by other UK investors, including households, local governments, public corporations, etc.

And another 20% or so by UK banks and building societies.

Just 30% is held by overseas entities of any type.

Cyberman60

antrobus wrote: »

I think you will find that, as a general rule, UK government gilts actually have a maturity date. If it has a maturity date then the debt will be repaid on the maturity date. Failure to do so would be regarded as a default, which is generally regarded as a Bad Thing.

P.S. I would have said ALL of UK government debt has a maturity date, but I'm not 100% sure that we've paid off all the undated stuff. I know that War Loan has just been repaid; but I can't remember whether there is any other old carp hanging around.

You are correct there on gilts, but the debt is being rolled over...IE: refinanced. As soon as the assets mature others are offered on the market to replace them. Thus the National Debt is never repaid... it is rolled over.

To say it is repaid, as you did, is thus totally disingenuous, as repaid would mean that no National Debt would exist, but clearly it is heading towards 2 Trillion, and very quickly under the SNP/Labour coalition. :eek:


.. and I will add that once debt and interest rates get too high, the rolling over becomes unsustainable and default occurs. That could well be what happens under the next government unless the debt is tackled.

zenmaster

According to the link the debt works out at £24.46 per citizen so why don't they just take 25 quid off everyone and pay the debt down?

An extra £43bn/year in the bank and debt at 0% GDP at a stroke!