Our National Debt

Backbiter

https://www.thecanary.co/2017/02/06/tory-mp-late-deleting-online-post-revealing-secret-heart-party-image/
Some fascinating figures that dispel some widely-held misconceptions about supposed fiscal responsibility

Jon_B_2

I've seen labour supporters getting themselves into a right sexual frenzy about this.

Look at the graph closely. It was going up sharply a good 6 months to a year before the coalition was elected. The fact is continued rise was the compounding effects of the late Labour fiscal policy and the bailout of the banks.

davomcdave

Jon_B wrote: »

I've seen labour supporters getting themselves into a right sexual frenzy about this.

Look at the graph closely. It was going up sharply a good 6 months to a year before the coalition was elected. The fact is continued rise was the compounding effects of the late Labour fiscal policy and the bailout of the banks.

Indeed. It's very hard to see why the national debt should have risen in the period 200-2007 when things were going well.

mrginge

In my simple mind I would expect the line to be falling under a prudent, Keynesian chancellor/PM. Especially in an extended period of economic growth that we saw in 2000-2008.

steampowered

Jon_B wrote: »

I've seen labour supporters getting themselves into a right sexual frenzy about this.

Look at the graph closely. It was going up sharply a good 6 months to a year before the coalition was elected. The fact is continued rise was the compounding effects of the late Labour fiscal policy and the bailout of the banks.

The graph shows that the national debt increased by about a third from 2010 to 2016.

I don't understand how you can blame Labour for that? How is Labour responsible for spending decisions during 6 years of Conservative government ???

The bank bailout has absolutely nothing to do with debt shown in the 2010-2016 figures. The spending on the bank bailout happened in 2008 and went to the debt pile of that year. Most of the state's shares in banks were sold for a profit under the coalition government - that was money which went to reducing the national debt in the 2010-2016 period, not increasing it ...

Jon_B_2

Because the bank bailout and associated previous overspending resulted in a national DEFICIT between income and expenditure.

That line will not start to level out until the deficit is reduced to zero. Our deficit when the coalition came to power was somewhere in he region of £120bn. It's now around £60bn.

This thread is the very evidence that labour supporters do not understand the simple economics around debt. Please stay away from the Debt Free Wannabe boards.

ukcarper

What about the period between 91 and 94

Thrugelmir

steampowered wrote: »

I don't understand how you can blame Labour for that? How is Labour responsible for spending decisions during 6 years of Conservative government ???

.

Because there's no immediate impact. Spending plans are set years in advance. Remember Brown in his period as Chancellor added 500,000 to the public sector payroll, also his nanny welfare state plans cost billions.

steampowered

Jon_B wrote: »

Because the bank bailout and associated previous overspending resulted in a national DEFICIT between income and expenditure.

I don't think you've thought this through.

The bank bailout only had a negative impact on the deficit while the bank bailout was going on.

When the bank bailouts finished, it had no more impact on the deficit, since no more money was being spent on the bailouts.

When the government sold the shares it acquired during the bailouts, which happened between 2010-2016 and is still happening, that was income received by the government which reduced the size of the deficit.

For example, Lloyds received £20.5bn from the government during the financial crisis. Since 2013 the government has recouped more than £17bn of that by selling its shares.

You'd expect the bailout to make the deficit figures for 2010-2016 to look better in comparison to 2008, not worse ......

Thrugelmir

steampowered wrote: »

When the bank bailouts finished, it had no more impact on the deficit, since no more money was being spent on the bailouts.

Debt incurs interest. The money to pay the interest is borrowed.

How much is RBS going to cost the taxpayer? There's a huge fine on the way from the USA.

MyOnlyPost

The bigger issue is that the debt is still climbing and public services are in disarray. The only way to steer the country back is to do the one thing that no politician dare talk about because it means you don't get elected, raise taxes.

Everyone talks about the state of the NHS, Education, National Defence cuts and everything else. Yesterdays news was about how public parks are going to ruin due to lack of finance. Nobody ever stands up and says "If you want all these drugs on the NHS you're gonna have to pay higher taxes, if you want more teachers, more soldiers or more spending in general, you're gonna have to pay higher taxes"

Until as a nation we have some kind of honest open discourse about what we expect from our public services and how much that will cost we will continue to have budget problems. This should also include the immorality of both evading and avoiding taxes by the very richest. Quite simply the economy cannot grow fast enough to increase spending on services whilst reducing the debt at the same time.