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Uk's Debt Will Quadruple Unless Drastic Steps Are Taken, Says S&p

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http://www.telegraph.co.uk/finance/economi...says-SandP.html

The ratings agency has calculated privately that the UK's public sector debt could quadruple from its current level of just over 50pc of economic output to 200pc or above within the next four decades as the cost of servicing public sector pensions, ballooning social security costs and healthcare burdens becomes overwhelming, The Sunday Telegraph has learned.

The warning is doubly sobering since S&P last month placed Britain's debt on to "negative outlook" – an explicit signal that it could soon be downgraded.

Although the agency calculated two years ago that the effects of an ageing population, alongside high pensions and healthcare costs could push Britain's net debt up above 150pc by 2050, it now fears the added cost of the financial crisis means the debt mountain could in fact rival that in 1945, when the cost of fighting a world war pushed debt well beyond 200pc of GDP.

The warning coincides with research showing that the true size of the UK's unfunded public sector pensions deficit, which needs to be funded through taxpayer's cash, is now £1,177bn – a staggering £20,000 for every person in the UK. A study for the highly-respected British-North American Committee, written by former Bank of England economist Neil Record, finds that the UK shortfall is far more severe than in the US or Canada.

Moritz Kraemer, head of S&P's sovereign ratings in Europe, Middle East and Africa, said Britain was facing a double challenge – first, to mend its books in the wake of the financial crisis and then to overhaul its economy drastically to stifle the pensions crisis. He said Britain was facing deficits unlike any before in peacetime history.

"We don't think they are willing to look into this fiscal abyss without taking any action," he said. "Following the financial crisis, the proportion of the problem is significantly larger than we thought but the Government has time to react to address these issues." The shortfall may mean having to raise taxes, cutting public pensions or healthcare spending, he added.

The agency said that unless Britain and its fellow leading Western nations took action to stem these costs, "the ratings of the high grade sovereigns would be very different."

Although the UK is the only country on so-called "negative outlook", meaning the agency is considering stripping it of its AAA rating for the first time, Mr Kraemer said the gold-plated rating could be salvaged if the next Government proves it is willing to bring the public accounts back in order.

He added: "We take pre-election pledges with a pinch of salt; they don't always materialise. Actions speak louder than words. It's easy to come up with solutions on paper but difficult to make them stick."

This is truly shocking I mean who would have guessed that there was a pension crisis.

And the idiot in charge has expanded the public sector making this an even bigger problem.

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It's unsustainable.

There is no way in hell that I would want to be living in this country 2020 and beyond, as the sums of borrowed money required to keep the status quo are staggering, and at what cost to the individual? The costs of meeting our basic energy demands will be ugly, as will the baseline sums of keeping the status quo for the entire population of retired baby boomers.

Sure there will be the lucky few who are independently wealthy and above the state, but the rest of us are going to be in direct competition with 7-8 billion other folks on the planet. It is pretty naive to think that we will continue to hold our prestigious place at the top of the food chain, especially when we will(have) be overtaken militarily, economically, politically, and technologically.

The only redeeming feature Britain has is the geography. We are an island, but that can work both ways.

It's all down to simple mathematics, or at least that is how Malthus defined it.

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Guest sillybear2
Yes but we have a strong and vibrant public sector :lol:

It's a growth area, Gordy will nourish it with vital 'investment'.

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It's unsustainable.

There is no way in hell that I would want to be living in this country 2020 and beyond, as the sums of borrowed money required to keep the status quo are staggering, and at what cost to the individual? The costs of meeting our basic energy demands will be ugly, as will the baseline sums of keeping the status quo for the entire population of retired baby boomers.

Sure there will be the lucky few who are independently wealthy and above the state, but the rest of us are going to be in direct competition with 7-8 billion other folks on the planet. It is pretty naive to think that we will continue to hold our prestigious place at the top of the food chain, especially when we will(have) be overtaken militarily, economically, politically, and technologically.

The only redeeming feature Britain has is the geography. We are an island, but that can work both ways.

It's all down to simple mathematics, or at least that is how Malthus defined it.

Correct. In fact, we already are and have been for a while now. That's why everything is going tits up so fast - because we are totally unprepared for this reality. Just look on any of BoomBoomCrashes threads, they are all still obsessed with arguing about how much more everyone should be paid and are utterly oblivious to the facts of life arriving shortly to a pay check near you. He's by no means alone either.

Unless we wake up really quickly this is going to be catastrophic instead of just very painful.

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Correct. In fact, we already are and have been for a while now. That's why everything is going tits up so fast - because we are totally unprepared for this reality. Just look on any of BoomBoomCrashes threads, they are all still obsessed with arguing about how much more everyone should be paid and are utterly oblivious to the facts of life arriving shortly to a pay check near you. He's by no means alone either.

Unless we wake up really quickly this is going to be catastrophic instead of just very painful.

Some of us are already awake, some will come around, but the majority wants to carry on with a 1950's social welfare state with little or no personal accountability.

If you need more proof, just look at the last remnants of British manufacturing today! They are all fighting for their very existence, in a non existent marketplace. We simply cannot compete with our current remuneration schemes. It is wholly uncompetitive against a global market.

Just how are we supposed to come out of this in good shape? House prices won't mean jack squat as we will have the lowest level of private sector income in decades trying vainly to prop up the welfare state.

The only two sure bets are greatly increased taxes and huge cuts to public spending. All that talk in Westminster is rubbish, as the politicians get to see the very same information we do, plus a lot more.

Bad news.

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It's investment, not debt. We're investing for the future.

We've got to believe Gordon. He has a proven track record of successful economic policies.

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Guest sillybear2
It's the right thing to do...

Exactly, why have Tory Cuts when you can have an S&P downgrade and an IMF directed emergency budget.

One thing Benn has undoubtedly learned from his father is that Labour governments cannot stop themselves from spending, they've gone from tax & spend to borrow & spend to print & spend.

When Labour are in power the end is only ever in the form of currency collapses, masses of debt and international bail outs, OR they get voted out before that is allowed to happen on a large scale. Whatever their promises and good intentions Labour governments always revert to form, that's why they've never before managed to live out a second term successfully, most are gone after one term. It's like putting a kid in charge of a sweetshop, it's nice to let the children play for a while, but the eventual outcome is to either force them to stop gorging themselves on the stock OR puke on your feet combined with an empty a shop and till, or both.

It's sad in a way, we should pity them really, 'labourism' should be classified along with other forms of disorders like compulsive gambling, alcoholism, drug addiction.

Edited by sillybear2

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"Over the next 40 years" :lol::lol::lol:

What a stupid article - of course drastic steps will be taken. In any event in 40 years I won't give a ****. Have S&P not got better things to do with their time than pump out this sort of drivel?

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Guest sillybear2
"Over the next 40 years" :lol::lol::lol:

What a stupid article - of course drastic steps will be taken. In any event in 40 years I won't give a ****. Have S&P not got better things to do with their time than pump out this sort of drivel?

But your children might, if you have any or plan to, it's precisely that attitude that allows government to run deficits like this because they always take the cowardly way out by selling the next generation down the river for short term gain.

This will be a fundamental shift that ramps up soon and will keep getting worse, we have North Sea depletion steadily leading to billions in outflows each month to pay for our energy deficit, boomers retiring en masse ~2020 along with a bill for unfunded pensions and health care, add in permanent structural deficits in government spending, the welfare state and bank losses and you have a perfect storm on the horizon.

Edited by sillybear2

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It's investment, not debt. We're investing for the future.

We've got to believe Gordon. He has a proven track record of successful economic policies.

Yes investing in productivity and efficiency, this is something most people don't understand about Ponzi Brown's policies.

Diversity coordinators do wonders for manufacturing productivity.

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http://www.telegraph.co.uk/finance/economi...says-SandP.html

He added: "We take pre-election pledges with a pinch of salt; they don't always materialise. Actions speak louder than words. It's easy to come up with solutions on paper but difficult to make them stick."

It's easy to come up with simplistic solutions on web forums, too, as is regularly proven here ;)

The devil will be in the implementation details.

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"Over the next 40 years" :lol::lol::lol:

What a stupid article - of course drastic steps will be taken. In any event in 40 years I won't give a ****. Have S&P not got better things to do with their time than pump out this sort of drivel?

Exactly. As long as holds together until I pop off, and I think it will, who cares?

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To summarise what may happen, I will address each issue.

The crash of the US economy will indeed affect the UK in a negative way, as it will the rest of the world. The main reason for this is the interdependency of the world economy and the internationalisation of major corporate interests.

An example of this was the recent Sub-Prime mortgage blow out. This had a knock on effect on the UK's economy as a lot of institutional investors in the UK had put money into the US sub-prime market. A result of which was a run/panic on Northern Rock as they could not borrow any more money from other financial institutions as the Sub-prime crash in the states made inter-bank lending harder to come by.

This is why the Bank of England had to bail out Northern Rock as the Bank of England acts as a lender of last resort. With the subsequent nationalisation of non-profitable elements of Northern Rock, the UK tax payer will pick up the bill and this will result in higher taxation. This is just the tip of the iceberg. As the US economy crashes, the UK's economy will also suffer and the government will start nationalising more financial institutions as a result, the direct and indirect/stealth tax rates will go up.

This will mean that you will have less money in your pocket to buy more expensive goods as you will be getting less for your pound. This intern will affect the currency exchanges in relation to the Euro and bring the pound into parity with the Euro, making the change to the Euro easier.

The coming food crisis or looming food crisis is being caused by a lot of things. The main one is that in the last year the world consumed more food than it produced. There are a lot of contributing factors. The first is the weather, some areas of the world are experiencing drought situations like in Australia, others are having floods or cold spells.

The knock on effect of this is that normal planting and harvesting have been put out of sequence. There is also the problem of crop disease, the disappearance of pollinating insects. Another serious problem is the change over to genetically modified crops, which have been proven produce less food per acre than organic/traditional seeds. Another factor contributing to the looming food crisis is the insistence of several governments insisting that a percentage of food crops be turned into bio fuel.

The outcome of this will be higher food prices in the short to mid term and shortages in the long term, the rising oil prices will contribute to this problem also and transportation costs rise, this increase will be passed on to the consumer. So your weekly shopping will cost more as time goes on.

The subject matter of the NWO, How does this affect the UK, plain and simple answer to this is that after the signing of the Treaty of Lisbon this year by Gordon Brown, the UK as a sovereign entity does not exist. The UK has been sold out by this current government to the Europe as a part of the consolidation into a World Government (NWO). How will this affect you and your family? The simple answer is more legislation forced through parliament from Europe, less governmental accountability. The end of democracy, as a lot of the law makers (EU Commission) in Brussels are not elected, but appointed, not by the public but by the EU itself. The EU is not a fully democratic institution. The NWO is the consolidation of power into the hands of the few. Expect a curtail of the freedoms that you take for granted now.

Rising fuel costs are going to affect everyone in the UK who owns a vehicle, or uses any public transportation as the fuel costs rise, the end user picks up the bill. The oil industry is a rigged game as it is run by a cartel of oil companies, which are owned by a very small group of people.

The UK government will not do anything to lower fuel costs for the individual as they rely on the taxes on the petrol to prop up their budget, and more so now that the UK has transformed itself to a mainly service economy, as the manufacturing portion of the economy has been eroded or offshored to Asia. This will mean that transportation costs will increase and the price of food and goods will go up.

Finally the Iran build up, this will affect you and your family directly in the form of petrol prices increases. If there is a war with Iran, there may be a necessity for mandatory military service. Hopefully this will not happen as a war with Iran will put the UK more in debt to the International Banking Cartel.

I hope this gives you some areas to research and look into. ;)

Edited by poorman

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So, poorman, to summarise - many people will starve and perhaps die in wars, but at least houses will be very cheap although nobody will have the money to buy one as all savings and income will be used to purchase fuel and food?

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So, poorman, to summarise - many people will starve and perhaps die in wars, but at least houses will be very cheap although nobody will have the money to buy one as all savings and income will be used to purchase fuel and food?

Excellent, just what I always wanted.

Although this will obviously exclude the politicians as they are far too important to starve.

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