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Optobear

Two Hundred Years Of Debt

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BBC report net repayment of 0.6bn out of a debt of £1.457 trillion during July.

http://news.bbc.co.uk/1/hi/business/8231135.stm

At that rate the debt will take 2428 months to pay off, or 202 years and 4 months.

So is the level of UK debt unsustainable?

Surely not, could Gordon be wrong about the UK economic miracle?

Icelanders think so - see this image of a tee-shirt in a Reykjavik shop.

http://www.flickr.com/photos/borkurdotnet/3221461589/

Optobear

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BBC report net repayment of 0.6bn out of a debt of £1.457 trillion during July.

http://news.bbc.co.uk/1/hi/business/8231135.stm

At that rate the debt will take 2428 months to pay off, or 202 years and 4 months.

So is the level of UK debt unsustainable?

Surely not, could Gordon be wrong about the UK economic miracle?

Icelanders think so - see this image of a tee-shirt in a Reykjavik shop.

http://www.flickr.com/photos/borkurdotnet/3221461589/

Optobear

Tont Blair must be laughing his slimy **** off all the way the European NWO Presidency.

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I think you may have forgotten to add compound interest into your calculation. I suspect if we incur no more debt from this point on, it will take a lot longer than 200 years to pay off.

Edited for spelling

Edited by Bear Monger

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I think you may have forgotten to add compound interest into your calculation. I suspect if we incur no more debt from this point on, it will take a lot longer than 200 years to pay off.

Edited for spelling

I am not sure, the figure is based on the UK population paying down £600m of net debt, so that on aggregate they made the interest payments too.

I guess that interest payments average around 7% pa, taking into account a mixture of expensive personal loans and cheaper mortgages.

So they paid off around £8.5bn in interest too - about £140 per person in the month, while the repayment was about £9.84 per person in the month.

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To be more accurate, for the current world economic model to work we need infinite debt. Not only does it have to increase every year but it has to never be paid off. This is a bit of a problem as it is impossible, that's the trouble with compound interest.

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At that rate the debt will take 2428 months to pay off, or 202 years and 4 months.

So is the level of UK debt unsustainable?

good for impact value, but no good for assessing what is to happen. There will always be borrowers at the bottom and owners at the top. Your sums should work out the latent value (the rolling loan) for a sensible average house value and then work out how long it will take to pay off the excess. This would then reflect a realistic time for the slump.

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To be more accurate, for the current world economic model to work we need infinite debt. Not only does it have to increase every year but it has to never be paid off. This is a bit of a problem as it is impossible, that's the trouble with compound interest.

This remiinds me of a summer when my brother and I had this never ending game of monopoly - to keep it going I made these little credit cards. Problem was, the game then just would not end! We both had millions owed to each other and I had shoved one of his houses up my nose. To my knowledge the game is still going.

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