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Really scary.


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Watched a prog on CH4 tonight about economics and the size of our National debt - did anyone know how big it actually is? A) ?4.8 TRILLION :shock: - IF you were to throw ?50 notes out of a window one after the other, it would take a thousand years to get rid of ?4.8 trillion. Now this isn't the "budget deficit" that "the cuts" are all about, but the totality of our sovereign debt- and it's all down to successive politians and Governments - using OUR money to bribe us with, in order to win votes. It would seem this could take several generations of austerity to pay back if ever, and the interest charges will no doubt rise. possibly leading to Governments printing money as in the Weimar Republic - and we know what that led to. :shock:

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When considering whether a person, business or country has too much debt you've also got to look at the value of their assets - something the C4 prog completely failed to do.

 

Consider a home mortgage. A mortgage of ?1/4 million is a VERY big debt against a ?250K house - but a pretty modest one against a ?1/2 million house.

 

According to the Office for National Statistics, the UK has a net worth of ?6.7 trillion - so in mortgage terms we have a loan to value ratio of around 40%.

 

Documentary makers know that big numbers are guaranteed to scare the gullible, but in reality it's trends, ratios and proportions that matter.

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Don't quite follow your line of arguement there Inky; don't think it's a case of "proportionality" but one of affordability. If you can't afford your mortgage due to reduced earning capacity, the debt continues to mount or is called in, in which case, you forfeit the asset (house) and finish up without shelter. Surely this is precisely how the current global debt crisis occured in the first place, with the crash in the US sub-prime market - releasing (unpaid) " toxic" debt into a global speculative system? Just wondering, what exactly you class as our National "assets" and just how such "assets" would be transposed into payment, and what the eviction process would entail? Now I'm not so gullible not to realise that, the prog was slanted to the neo-con right, and whilst concocting some counter arguements in my mind, I'm still prepared to accept self evident truths - however unpalatable. :shock:

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Obs, if you owe the bank a million you're scared of them. If you owe the banks a trillion, they're scared of you!

 

As you said, what can the banks actually do to call the debts in? take nominal ownership of the M6? And if they were to downgrade our national credit rating and increase the rate at which the UK can borrow money - then that just makes default more likely and the banks lose everything!

 

The debt can be serviced easily enough, it's lower in terms of GNP than it has been on several occasions in the past.

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Debt is a fact of life. For individuals, businesses and governments.

 

The alternative is not to have anything until you've saved up enough to pay cash for it - which in terms of the economy means taxpayers paying for things in advance which they will never see the benefit of.

 

Borrowing and paying back means having things sooner, and having those who get to use them pay for them.

 

Like I said, in real terms the national debt has often been higher than it is now, it was affordable then and is affordable now - no need for headless chicken panicing.

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Well that certainly explains why we're in the mess we're in - it's all down to the "I want it, and I want it now" culture, guess our gt gt grandkids will understand?! As for " panicking", not at all, my generation has had the cake and ate it! :wink: PS. and to them we can't say, for your tomorrow, we gave our today. :cry:

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LtKije. you don't half spout rubbish 99.9999999% of the time. You obviously didn't listen to the message in the piece. How can less than half of the economy pay for the rest without the whole economy going down the drain? :shock::shock:

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To have it your way asperity, we would have to make things to export, unless you are counting service industries like the banks. When was the last time we exported (sold) more goods abroad than we imported. And when your beloved private sector cocks up i.e. the banks who bails them out. Can you give me an example of anything in the public sector, failing on anything like the banks. I have no doubt you are going to pile the blame on the last government, but at the end of the day it was the banks that made the bad decisions.

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Which means that the government is at fault, bailing out the banks with money they don't have and putting the whole country in hock. The public sector do not produce anything of financial value and needs the private sector to create the cash flow. Maybe things work differently on the planet LtKije :roll::roll::roll:

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Like I said before LtKije, you spout rubbish 99.99999% of the time. If the banks that were failing (not all of them were) had been allowed to sink the others would have picked up the pieces. There would have been a lot of pain, but not as much as we are all now facing. :wink::wink:

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If the banks that were failing (not all of them were) had been allowed to sink the others would have picked up the pieces. There would have been a lot of pain, but not as much as we are all now facing. :wink::wink:

 

So sayeth the gospel of Asp. Halley bloody looyah. Now how on earth would a mere mortal know that for certain?

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