Tuesday, Jun 30, 2009

Is UK PLC almost bankrupt?

Bloomberg: Sterling Crisis Looms as U.K. Unraveling Points to Budget Cuts

June 30 (Bloomberg) -- The state of the U.K. economy fills British financial historian Niall Ferguson with foreboding.
“The probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,” the Harvard University professor says.

Posted by flintster1994 @ 04:58 PM (676 views) Add Comment

2 Comments

1. devo said...

Perhaps Niall Ferguson should apply his talents closer to home:

STATES BRACE FOR SHUTDOWNS

(Los Angeles Times)
The last time Indiana missed its deadline for passing a budget and had to shut down the government was during the Civil War.

But on Monday, as lawmakers raced to hammer out an agreement over school funding, state agencies began preparing 31,000 workers to be temporarily out of a job. Republican Gov. Mitch Daniels has warned residents that most of the state's services -- including its parks, the Bureau of Motor Vehicles and state-regulated casinos -- would be shuttered unless a budget is passed today.

Indiana is one of five states -- along with Arizona, California, Mississippi and Pennsylvania -- bracing for possible shutdowns this week as time runs out for lawmakers to close billion-dollar gaps in their fiscal 2010 budgets.

http://www.latimes.com/news/nationworld/nation/la-na-shutdown30-2009jun30,0,1912245.story?track=rss

Tuesday, June 30, 2009 05:19PM Report Comment
 

2. night said...

Looks like this has already been posted.

Still, good opportunity for me to repost my response from the previous article, which was in response to my initial question.


Thanks, that's a pretty comprehensive list. I do wonder how many of those same ideas could/would be recycled this time around to get our debt down. A few thoughts:

  • We don't have an immediately obvious source of labour equivalent to "men coming back from the war". Unless perhaps we count the Public Sector.

  • I doubt that the UK would try to pay off all the debt, despite whether it's a good idea to do so or not. Once it's back to "serviceable" levels I would presume the government would call "business as usual". Any thoughts as to what that level is (debt/GDP)?

  • While I take the point that the US had a vested interest in the UK's survival, I'm not convinced that everything is SO different now. We effectively have their money. They would rather we paid it back than defaulted, so surely they have a vested interest in our survival in order to get their money back (nevermind a return on the investment).


Again, interested to hear people's thoughts or any pertinent information on this.

Tuesday, June 30, 2009 11:46PM Report Comment
 

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