Tuesday, Nov 18, 2008
Putting the UK national debt in context
BBC News Magazine: The myth of record debt
Despite the condescending 'P4AC' writing style, this is an informative read. Author proposes that the UK debt situation is not as bad as reported, when taken in context. Good to read some articles contrary to the Zeitgeist. Have yet to verify his assertions myself however....
Posted by doom&gloom @ 01:38 PM (1489 views) Add Comment
21 Comments
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1. doom&gloom said...
...actually, reading it again, it looks like he's overlooked new off-balance-sheet debt such as PFI.
Plus he excludes Northern Rock debt (and presumably debt from other banking 'investments'), as he believes the government should eventually get this back. However I do not agree, as this investment is ultimately in UK mortgages, and I believe these will soon show higher defaults than US 'subprime'.
2. sold out said...
sounds like quite few exclusions then. the article wasn't written by Gordon Brown was it?
3. Jimmymac said...
the main problem in this country is record levels of private debt as a percentage of GDP which he ignores completely. Public debt will become a serious issue as the recession/depression deepens.
4. paul said...
Sounds very similar to the statistically questionable arguments on the BBC website last year and the year before regarding:
1. Dwindling supply and escalating demand for housing.
2. How current estimates of average house prices to average incomes were irrelevant.
Both of which have recently been discredited. I'd say the millions of investor decisions to get out of GBP carry an awful lot more weight than a state-sponsored "meeja" puppet.
5. Fjcruiser said...
Debt £64Bn, is this a joke ? Oh sorry just forgot a few items like Northern Wreck,PFI....Just double that mate.
6. uncle tom said...
What a great piece of Labour spin - he is either a Labour puppet or too stupid to realise that true government borrowing is light years ahead of the 'official' estmates, thanks to all the big figures being deliberately excluded from the data.
Check out the fund raising by the DMO (debt management office - the people who actually borrow for the government) - its currently around £1bn per day!
7. bellwether said...
He is right about context though which is mostly overlooked in the race for a headline or pet theory. It's something that happens on this site too, and given the apparent distaste for spin we should surely try to be better than that.
8. John said...
No mention of personal debt!!!!!!!
9. doom&gloom said...
These DMO docs indicate £59.3bn new borrowing in 2008-9 for govt cash requirements plus a £37bn top-up for the banking bail out. Looks like they are expecting to redeem £17.3, which takes them to approx £42bn new borrowing plus £37bn on top for the banking bail out.
http://www.dmo.gov.uk/documentview.aspx?docname=remit/sa120308b.pdf&page=Remit/full_details
http://www.dmo.gov.uk/documentview.aspx?docname=gilts/press/pr141008.pdf&page=Remit/full_details
10. rumble said...
"Despite the condescending 'P4AC' writing style, this is an informative read."
"...actually, reading it again"
"quite few exclusions then"
"statistically questionable arguments"
"great piece of Labour spin"
Hmm, P4AC, perhaps you could post something condescending and informative?
11. Jayk said...
@Paul,
"Sounds very similar to the statistically questionable arguments on the BBC website last year and the year before....."
Is that like most HPC'ers insisting oil would by $200+ by Xmas?
12. p. doff said...
7. rumble said...Hmm, P4AC, perhaps you could post something condescending and informative?
I think he's been sent to 'the naughty room' along with Malct & Nooneo. Don't worry, they'll be back again soon........unfortunately.
13. Unimpressed said...
Totally partisan article, doing exactly what the author complains about - skewing the figures. Rather laughable.
14. planning4acrash said...
Nope, I've been out joging and am canning puree from the 10 squashes I got for 30p each!! YUM, squash puree!!!!
Um, well, debt not bad here? Our debt to GDP is greater than that of the USA and is greater than our GDP, thus impossible to pay off without massive Sterling devaluation, you aint seen nothing yet, I'm targeting Dollar parity by this time next year, or a year January. America is huge and the UK will fall musch easier. Um, debt to earning ration? I think France is something like 80%, USA something like 140% and we are at about a whopping 170%!!!!! Absolutely no hope without devaluation and bankruptcy. Gonna hurt.
I hope that was condescending enough for you! But really, what idiot signs on here and looks for somebody to reinforce the mainstream media (There you go, total condescension, in your face, right there) - Go stick it Peoples Broadcasting Corporation of the United Socialist States of Great Britain!!!!!
15. Jacks1 said...
Hello everyone, I've been reading HPC for about 12 months now and have gained a great deal of insight for doing so.
Re this article, I agree with P4AC in that anything which eminates from the BBC should be taken with a pinch of salt. Also I would suggest that any figures expressed as a percentage of GDP are fundamentally flawed. The huge rise in GDP since the last recession has been almost totally due to the massive rise of debt, the cause, implications and result of which are well appreciated by the contributors to this blogg.Therefore GDP figures are merely measuring economic activity much of which is debt derived. The economy is about to return to a level more in keeping with its wealth creating or real productive capacity. We are about to witness a massive and sudden contraction of the UK economy which will make mincemeat of any borrowing figures worked out as a percentage measure.
16. alan said...
Cameron has just been on SKY TV saying he won't try to match Nu Labour spending promises as we approach the next election. He says Gordon's spending plans will leave the UK with a pile of debt it can't get out of.
I thought we were pretty close already!
17. doom&gloom said...
p4ac - please could you quote your sources?
18. planning4acrash said...
I heard it on the podcasts on maxkeiser.com - but, hows about you use google? I quote when I can, or can be bothered, but was busy canning, and damn, just found that squash puree can't be canned. Drat, and double drat, I have to make soup first, squash puree too dense :(
19. bellwether said...
A good question.
20. bellwether said...
and a poor answer.
21. planning4acrash said...
Can't you use google? I'm busy!