"they Have Decided To Clear The Debt To Zero By 2015"

[RJJ]

It would be easier for people to understand if the media etc described the deficit as an annual overspend.

[winkie]

It would be easier for people to understand if the media etc described the deficit as an annual overspend.

...or extending overdraft.

[Tired of Waiting]

...when you are dealing with this PRAVDA organisation who do not have to generate their income...just how to spend it like a Labour Government ....then understanding clearance of debt and other such survival planning does not occur in their fake little world....time to get rid......

+ 1

I am starting to think that the BBC is even more damaging to Britain than the Labour party.

[Tired of Waiting]

Oh, I think they do. They just know that most of us don't.

Stick around a little longer and you will stop overestimating the "elites".

[Executive Sadman]

Im just surprised labour never passed a law including the word 'debt' as a hate crime.

Such an ugly word, credit is far far nicer and fluffy.

[Tired of Waiting]

Few questions;

1. To whom exactly do we owe this money?

2. Is the 200 billion of QE money within the 1trillion figure?

3. How much of it is balanced by government ownership of the banks?

1) Mostly to British residents/institutions. I couldn't find a precise number when I tried to research that.

2) The QE money actually dilutes the value of sterling. In a way, it extracts that value from savers. It is closer to theft than real debt.

3) Very little. Contrary to popular perception, the bailouts are not that significant when compared to gov. expenditures of some £700 billion pre year.

We had a thread in April 2010 with some useful numbers:

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

.

[winkie]

Im just surprised labour never passed a law including the word 'debt' as a hate crime.

Such an ugly word, credit is far far nicer and fluffy.

That's why they kept adding it to the 'credit card'.

They made a right fool of people that worked hard for it and tried to save it to help protect their futures.....all the while they were ******* it up the wall on the never never to be repaid....all of us will pay for their laid back attitude, lack of monetary regulation and short term outlook.

[Tired of Waiting]

The confusion between deficit and total debt seems to be exceedingly common.

How can people be allowed to vote if they do not understand this distinction?

How can the state the UK is in be turned around if vaste swathes of the voting public do not understand just how deep in the doo doo the UK really is?

No, a bit of austerity will not have the UK clear of its debt by 2015 you radio presenter morons; it will stop us getting in a bigger pickle than we are already in. With this lack of understanding of basic financial terminology, no wonder so many people take out ridiculous mortgages...

It is this sort of thing that makes me doubt the benefit or validity of universal sufferage. If people don't understand the basics of the problem, why the heck should they think themselves able to voice an opinion by voting? In the QT video above, people are arguing that we should overspend by over £2000 per man woman and child every year to keep "growth." Do none of them have any imagination, at all? Do they not understand how serious this is?

I wouldn't mind so much if I didn't have to be made to suffer for their fecklessness, but the fact is the mindless majority enforce the results of their stupidity on everyone.

That thought has also crossed my mind. Democracy is indeed a very counter-intuitive system. Problem is, all the others are worse, etc. I know, I know. But can't voters be required to pass at least a basic numeracy test?!

This deficit v debt confusion before the election was a major worry for me. I started quite a few threads on it. Like the one below, with a rare happy moment. Some of us even hoped it could catch on... ... nah, it didn't.

(Video link there is still working!!!) Just 3 minutes long. Worth a trip down memory lane.

Sky News:

" Sky's Jeff Randall accused Mr Darling of playing on voters' lack of knowledge about the economy and encouraging them to muddle up the debt and the deficit. "

LINK TO VIDEO: http://news.sky.com/skynews/Home/video/Chancellor-Alistair-Darling-Denies-Misleading-Voters-Over-UK-Debt/Video/201004215600204?lid=VIDEO_15600204_ChancellorAlistairDarlingDeniesMisleadingVotersOverUKDebt&lpos=searchresults

( And it sounds like even Adam Boulton has only recently understood the difference. )

I also started this thread back then:

Voters Scared Of Tories Cutting “ Debt ”, Not “ Deficit ”

Even HPC Forum Veterans confusing Debt with Deficit

http://www.housepricecrash.co.uk/forum/index.php?showtopic=139686&view=findpost&p=2450196

.

Edited October 17, 2010 by Tired of Waiting

[lets get it right]

...when you are dealing with this PRAVDA organisation who do not have to generate their income...just how to spend it like a Labour Government ....then understanding clearance of debt and other such survival planning does not occur in their fake little world....time to get rid......

Ohhh, yes please.

[Tired of Waiting]

...the only problem with the Debt figure is with public sector pensions and UK Pensioner pensions etc added there are a few trillion to be added to the the one trillion the Treasury reports.....

The Public Sector pension obligations seem to be around £1tr, equivalent to £30,000/household.

Looks like in 4 years, when (IF) the debt stops growing, the total gov. debt will be £90,000 per UK household.

Some numbers in my post #35, above ( http://www.housepricecrash.co.uk/forum/index.php?showtopic=152941&view=findpost&p=2750573 )

.

Edited October 17, 2010 by Tired of Waiting

[Democorruptcy]

Looks like in 4 years, when (IF) the debt stops growing, the total gov. debt will be £90,000 per UK household.

If they cut the deficit to zero in 4 years won't the debt will still be growing as there is interest to pay on it?

It's going to grow each year because of the structural deficit AND interest accumulated.

The debt will only stop growing when we have no deficit and enough surplus to pay the interest.

What I don't understand is why don't the ConDems get this "debt" and "deficit" out in the open and make sure the public understand it? Then there will be more people who realise what Labour have done and understand why we need cuts. At the moment the perception is that the cuts are just a Tory whim.

The other thing I don't understand about the ConDems is that on the last 3 Question Times someone from Labour has blamed our debt on the bankers. Why have all the ConDems let that comment pass? Instead of mentioning Labour overspending.

[Tired of Waiting]

What I don't understand is why don't the ConDems get this "debt" and "deficit" out in the open and make sure the public understand it?

I can't understand that either.

As you can see from my OPs above, this thing has been annoying me and puzzling me for months.

I do not understand it.

And I do not believe that people can't understand that. Being frank and practical now: even people on the left side of the bell curve.

You just have to use plain English: shortfall, borrowing.

95% of the population can understand that.

I really really really don't get it.

on the last 3 Question Times someone from Labour has blamed our debt on the bankers. Why have all the ConDems let that comment pass? Instead of mentioning Labour overspending.

That is easier. You can NOT give the impression that you are "on the side of "bankers" ".

Period.

[Democorruptcy]

That is easier. You can NOT give the impression that you are "on the side of "bankers" ".

Period.

All they need to say is something like "It wasn't JUST the bankers, it was Labour overspending and not fixing the roof while the sun was shining"

[Tired of Waiting]

All they need to say is something like "It wasn't JUST the bankers, it was Labour overspending and not fixing the roof while the sun was shining"

Dangerous. They always have to think on how the tabloids can stretch and distort what they say.

Here I think the main fault was with the BBC. Particularly their financial/economics journalists.

[RJJ]

What surprises me the most is the amount of controversy we have already seen regarding the cuts and the government are not even talking about clearing debt, just attempting to get spending down to sensible levels. I was passed a leaflet on my way home from work in the week regarding a planned protest against public sector job cuts, it's really difficult to see how they are going to drum up support given the situation.

[Democorruptcy]

What surprises me the most is the amount of controversy we have already seen regarding the cuts and the government are not even talking about clearing debt, just attempting to get spending down to sensible levels. I was passed a leaflet on my way home from work in the week regarding a planned protest against public sector job cuts, it's really difficult to see how they are going to drum up support given the situation.

That's the point though. People don't understand the "situation" with such as the BBC portraying cuts as unnecessary because we don't need to reduce the "debt" by 2015.

[CrashConnoisseur]

...the only problem with the Debt figure is with public sector pensions and UK Pensioner pensions etc added there are a few trillion to be added to the the one trillion the Treasury reports.....

That's like saying your own debt figure is £150,000 because you have a liability to feed yourself for the next 60 years.

[South Lorne]

The banks owe us over a trillion pounds. The Tories are not telling the real truth behind this debt.

....did Labour..?....

[South Lorne]

Strange first post but why is all the talk about tackling the deficit and not debt? When does the debt need to be repaid or won't it!?

...normally you control your current account before tackling the longer term debt....ask the person who runs the school tuck shop....

[South Lorne]

To be fair, their commercial arm, BBC Worldwide, is at least a bit more entrepreneurial.

Private Eye had a story about them asking for a new Dalek design for the fifth series of Doctor Who (link), so that they could fleece the nation's 7 year olds for yet another set of Delek merchandise.

Now that's capitalism.

.....not fair ...their income comes from the taxpayer initially ...they are the scavengers of the transmission waves....

[South Lorne]

How can people be allowed to vote if they do not understand this distinction?

...do you think the people who voted for Gordo and Labour understood what they were voting for....

[South Lorne]

That's like saying your own debt figure is £150,000 because you have a liability to feed yourself for the next 60 years.

...the debt can be broken down into short, medium and long term..and measured against

GDP in total ...it can be quantified in different ways ..take your pick ...the issue is ...it is due to be settled at some point....and it would help to have a deficit of less then 3% as a starter which will help us to start tackle this debt....

[Nickolarge]

Two chaps reviewing the papers at about 11:20pm talking about spending cuts.

The Talksport "political commentator" says shrugging his shoulders as if he cannot think why they are doing it:

"They have decided to clear the debt to zero by 2015 so we are back to zero"

Only on the BBC! (or maybe Talksport as well)

This just goes to show how the current round of BS that the coalition is putting out is being interpreted by those it is aimed at....the politically and economically naive.

What they are actually doing is announcing planned cuts that will be implemented between 2013 and 2015. The delay is supposedly unavoidable as these things can't be done overnight.

The political bonus is that there will be a backlash after Wednesday's spending review and people like the guy above will think it all kicks off the following day. For a while the current government will lose popularity. Due to the long lead in time there will follow a period when nothing changes too much and folk will start to say "This isn't as bad as expected". The governments stock will rise as it seems that they have steered us to safety.

It will be during that period that the coalition will collapse in some way engineered by the Tories that makes it look like it's not their fault. An election will be called to try and capitalise on the surge in the polls.

If you think this sounds far fetched look to the recovery in house prices over the last two years. The crash was caused by bad news. The credit crunch and all that. When it became clear that we were not going broke, at least not straight away, the bad feeling eased and prices rose. This week we are at the peak of the latest bad news cycle.