Tired of Waiting Posted April 30, 2010 Share Posted April 30, 2010 (edited) BBC: Total National Debt Per Household = £90,000 Radio 4, PM, yesterday (Thursday, 29 April) - - - This week the Institute for Fiscal Studies (IFS) published a report on the national debt, annual budget deficit, and necessary budget cuts. The BBC got all these mindbogglingly big national numbers from the IFS report, and to bring them "down to earth", the BBC divided them by the number of households in the country - 25.5 million households. It starts at 50min 50sec into the program. About 5 minutes long: LINK: http://www.bbc.co.uk/iplayer/console/b00s2pk1 "PM", Radio 4, BBC, Tursday, 29 April 2010. The results are (if didn't make any mistake transcribing them) : Cuts per household per year: £1,350 from the Lib Dems £1,700 from Labour £2,000 from the Conservatives Deficit = Annual borrowing Debt = Stock of all the money that the government owes, on-balance-sheet. Official National Debt = on-balance-sheet Off-balance-sheet "debts" (obligations) : PFI + Public Sector Pensions. National numbers: 776 bn - National Debt (official, "on-balance-sheet" debt) almost 20% more - PFI (off-balance-sheet) 770 bn - Public Sector Pensions (off-balance-sheet) Per household: £30,000 - National Debt £5,000 - PFI a few hundred pounds either way - Banks Bailout £30,000 - Public Sector Pensions £65,000 - Total Now £25,000 - Borrowing in the next 4 years £90,000 - GRAND TOTAL . Edited April 30, 2010 by Tired of Waiting Quote Link to comment Share on other sites More sharing options...
Ologhai Jones Posted April 30, 2010 Share Posted April 30, 2010 The worrying part is that maybe the only way to really get out of this mess is to make that £90k per household into a relatively small real-terms amount... Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 30, 2010 Share Posted April 30, 2010 BBC: Total National Debt Per Household = £90,000 Radio 4, PM, yesterday (Thursday, 29 April) - - - This week the Institute for Fiscal Studies (IFS) published a report on the national debt, annual budget deficit, and necessary budget cuts. The BBC got all these mindbogglingly big national numbers from the IFS report, and to bring them "down to earth", the BBC divided them by the number of households in the country - 25.5 million households. PM, on Radio 4, Tursday, 29 April 2010. LINK: http://www.bbc.co.uk...onsole/b00s2pk1 Some 5 minutes long. It starts at 50min 50sec into the program. The results are (if didn't make any mistake transcribing them) : Cuts per household per year: £1,350 from the Lib Dems £1,700 from Labour £2,000 from the Conservatives Deficit = Annual borrowing Debt = Stock of all the money that the government owes, on-balance-sheet. Official National Debt = on-balance-sheet Off-balance-sheet "debts" (obligations) : PFI + Public Sector Pensions. National numbers: 776 bn - National Debt (official, "on-balance-sheet" debt) almost 20% more - PFI (off-balance-sheet) 770 bn - Public Sector Pensions (off-balance-sheet) Per household: £30,000 - National Debt £5,000 - PFI a few hundred pounds either way - Banks Bailout £30,000 - Public Sector Pensions £65,000 - Total Now £25,000 - Borrowing in the next 4 years £90,000 - GRAND TOTAL we owe 65 now...in four years that is going up 6.5K per year. thats 10% per year. its going exponential.....crack up boom at next failure. Quote Link to comment Share on other sites More sharing options...
AteMoose Posted April 30, 2010 Share Posted April 30, 2010 Im amazed PFI isn't higher.... Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted April 30, 2010 Author Share Posted April 30, 2010 The worrying part is that maybe the only way to really get out of this mess is to make that £90k per household into a relatively small real-terms amount... Yes, I agree. To be precise (as there is always some inflation), the question is: how much of this debt will be inflated away? And how? Currently the Bank of England is under legal obligation of targeting 2%. Will they just "lose control" a bit? Will Mervyn say "Oops, sorry, we thought it was just a temporary spike"? That won't work for more than a few months, and they will have to raise interest rates. Or will the government increase the official target, explicitly, to 3%? 4%? I doubt it. Or will they go back to RPI, and use the declining house prices to push down the official numbers? <-- That is the most likely way, IMHO. Still, how much lower RPI will be from CPI? During the boom RPI was about 1% above CPI. Next, it will probably be the other way round. Not much. A combination of higher target (4%), and RPI? I don't know. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted April 30, 2010 Author Share Posted April 30, 2010 Im amazed PFI isn't higher.... PFI is HUGE ! It only looks small WHEN compared to the other two. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted April 30, 2010 Author Share Posted April 30, 2010 we owe 65 now...in four years that is going up 6.5K per year. thats 10% per year. its going exponential.....crack up boom at next failure. God I just realised something terrible. The BBC made a mistake. They divided the national numbers by the total number of households in the country, and not by the number of tax-paying households in the country. I dont wanna emigrate... It will be such a hassle!!! Quote Link to comment Share on other sites More sharing options...
BalancedBear Posted April 30, 2010 Share Posted April 30, 2010 Inflation will only help if wages inflate too. At this time though wages are static or deflating, which costs are inflating - this is a very serious problem, and in this situation, inflation will make matters worse, not better. Quote Link to comment Share on other sites More sharing options...
LuckyOne Posted April 30, 2010 Share Posted April 30, 2010 The worrying part is that maybe the only way to really get out of this mess is to make that £90k per household into a relatively small real-terms amount... Or looked at another way. The average house price is something like £170k. It only needs to rise to £260k to "pay off the debt". In some way, people may be very keen on rising house prices because they see them as a way to get out of personal as well as national debt problems. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 30, 2010 Share Posted April 30, 2010 Or looked at another way. The average house price is something like £170k. It only needs to rise to £260k to "pay off the debt". In some way, people may be very keen on rising house prices because they see them as a way to get out of personal as well as national debt problems. I know you know the answer, but how does the price rise to 260K from 170K? Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted April 30, 2010 Author Share Posted April 30, 2010 Inflation will only help if wages inflate too. At this time though wages are static or deflating, which costs are inflating - this is a very serious problem, and in this situation, inflation will make matters worse, not better. Yes, it will make things worse for workers on fixed salary. But it will benefit debtors on fixed rates. Including the government on their fixed rate gilts. On another topic, I was surprised by the very small estimate for the cost of the banks bailout. I mean, I knew all along that it has been much smaller than the left-leaning people imagine, but I am not sure it has been this small - only £ 6 billions? Quote Link to comment Share on other sites More sharing options...
DeepLurker Posted April 30, 2010 Share Posted April 30, 2010 I know you know the answer, but how does the price rise to 260K from 170K? Lay laminate floor in all downstairs rooms. Quote Link to comment Share on other sites More sharing options...
MrFlibble Posted April 30, 2010 Share Posted April 30, 2010 Lay laminate floor in all downstairs rooms. Also put some twigs in a bowl and fold the toilet paper to a point - those two suggestions alone add £25k to the value Quote Link to comment Share on other sites More sharing options...
Guest Noodle Posted April 30, 2010 Share Posted April 30, 2010 Lay laminate floor in all downstairs rooms. I think the answer is . . . trash currency. Quote Link to comment Share on other sites More sharing options...
Warwick-Watcher Posted April 30, 2010 Share Posted April 30, 2010 God I just realised something terrible. The BBC made a mistake. They divided the national numbers by the total number of households in the country, and not by the number of tax-paying households in the country. : Don't you mean divided by the number of non-public sector tax payers? Their taxes are effectively paying for part of their own salaries! Quote Link to comment Share on other sites More sharing options...
Neil B Posted April 30, 2010 Share Posted April 30, 2010 Also put some twigs in a bowl and fold the toilet paper to a point - those two suggestions alone add £25k to the value ...hide all the clutter in the garden shed, switch all the lamps on in every room and put so many cushions on the beds that you can't actualy get into the bed anymore: Voila - plus another £25k Quote Link to comment Share on other sites More sharing options...
yellerkat Posted April 30, 2010 Share Posted April 30, 2010 (edited) God I just realised something terrible. The BBC made a mistake. They divided the national numbers by the total number of households in the country, and Don't you mean divided by the number of non-public sector tax payers? Their taxes are effectively paying for part of their own salaries! Thanks, guys, you've just made my weekend. ED: formatting Edited April 30, 2010 by yellerkat Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted April 30, 2010 Author Share Posted April 30, 2010 Don't you mean divided by the number of non-public sector tax payers? Their taxes are effectively paying for part of their own salaries! Yes, I know, you are right. (But if you say it explicitly like that you may attract the resident lunatic that doesn't accept that. Long story.) But yes, I was thinking about net-tax-payers, hence private sector tax-payers. And yes, if we calculate that the numbers will be even more depressing - particularly for households with two net-tax-payers households, such as mine. (I don't really want to calculate it, yet. I am not ready for it.) Quote Link to comment Share on other sites More sharing options...
Guest UK Debt Slave Posted April 30, 2010 Share Posted April 30, 2010 Thanks, guys, you've just made my weekend. ED: formatting Prepare to be a*se raped people, cos no matter who wins this election, we are on the hook for a lot of debt They will be coming for whatever asset wealth you have, pensions, saving, property, investment, gold, the fekkn lot Quote Link to comment Share on other sites More sharing options...
SarahBell Posted April 30, 2010 Share Posted April 30, 2010 Lay laminate floor in all downstairs rooms. AND on the stairs! Quote Link to comment Share on other sites More sharing options...
SarahBell Posted April 30, 2010 Share Posted April 30, 2010 So 40% of jobs in Wales are public sector and about 30% rest of UK... So those jobs pay off that debt too? Quote Link to comment Share on other sites More sharing options...
council dweller Posted April 30, 2010 Share Posted April 30, 2010 Inflation will only help if wages inflate too. At this time though wages are static or deflating, which costs are inflating - this is a very serious problem, and in this situation, inflation will make matters worse, not better. I wonder what happened to 'The Unions'? Without them there'll be no wage inflation....I can't imagine that any employers will go all Henry Ford! A serious situation indeed. If we're lucky we'll see our disposable incomes 'slowly' disappear! Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted April 30, 2010 Author Share Posted April 30, 2010 Thanks, guys, you've just made my weekend. ED: formatting Sorry. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted April 30, 2010 Author Share Posted April 30, 2010 (edited) So 40% of jobs in Wales are public sector and about 30% rest of UK... So those jobs pay off that debt too? Sorry, but... no. Unfortunately. In a way, in economic terms, their "taxes" don't really exist. It is just a number written in their payslip. If the gross salary is £25,000, and they "pay" 25% tax, they actually just get £18,750 NET. The government doesn't really send them the £25,000 and they send back the £6,250. They just receive their net-pay. Simple. On the positive side though, for us, tax-payers, the actual, net payroll is a bit smaller than in these formal accounts. The main advantage to see the accounts as they are - net - is to nip in the bud the very common (and very dangerous) mistake of imagining that public expenditure can be a sustainable way to "stimulate the economy" - distortion of Keynesianism very common now-a-days in the British Labour Party. It is not sustainable. An inflated public sector is not affordable by a private sector weighed down by too much taxes. And if a government then starts to borrow to pay these expenses, then it just makes things worse, by having to pay interest, and accumulating debt for the next generations - as this government has done, and is still doing. Sorry. Edited May 1, 2010 by Tired of Waiting Quote Link to comment Share on other sites More sharing options...
Si1 Posted April 30, 2010 Share Posted April 30, 2010 Yes, I agree. To be precise (as there is always some inflation), the question is: how much of this debt will be inflated away? And how? on balance sheet debt cannot be inflated away - there are conditions built into gilts these days off-balance sheet can and will be inflated away as the people who are owed it (PFI companies and public servants) won't understand it until it is too late my money is on them getting absolutely hammered Quote Link to comment Share on other sites More sharing options...
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