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Years More Spending Cuts To Come, Says Obr

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http://www.bbc.co.uk/news/business-33092658

Further cuts in government spending will be needed beyond this parliament in order to bring the national debt under control, the Office for Budget Responsibility (OBR) has warned.

In its annual report, the OBR said that without further spending cuts or tax rises, the national debt would only increase.

It said a permanent £20bn cut in annual public spending will be needed by 2020.

That would help bring the national debt down to 40% of GDP by 2064, it said.

If achieved, this means it would have taken more than half a century to bring the national debt back to the same level it was before the 2008 financial crisis.

Last year, public sector net debt was £1.48tn, or 80% of economic output, compared with around £600bn, or around 42% of GDP, in 2008.

And the OBR warned that even a cut of this size, equivalent to 1.1% of GDP, would not be sufficient to keep the national debt at 40% beyond 2064.

_83538397_govt_borrowing_1946_2014_624gr

A very nice graph showing how screwed the entire economy is. All that borrowing to prop up the economy.

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ARE THE ACTUALLY STARTING THE CUTS?

Not really, just shifting spending away from other departments and into health and education. Total spending will still increase every year.

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inflate it away

that is the answer

Quite a lot of the debt is indexed linked.

A lot of unfunded liabilities - mainly public pensions - are too.

We can mess around around the edges by using different indices but nothing major.

We have two choices: default or pay it back.

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It defies comprehension how Osborne has managed to pass off his Keynesian borrowing/spending orgy as austerity!

simply because the current deficit is smaller than the one he inherited

which, on its own, could be seen as a move in the right direction

but it doesn't take account of PFI, outsourcing (creating liabilities for the taxpayer), asset sales and future commitments

if osborne can deliver a balanced budget by the end of this parliament it will be marvellous and he will deserve much kudos

if he can deliver a sustainable budget surplus and start to pay down the debt then even more so

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Quite a lot of the debt is indexed linked.

A lot of unfunded liabilities - mainly public pensions - are too.

We can mess around around the edges by using different indices but nothing major.

We have two choices: default or pay it back.

Yep the real debt is off balance sheet, it's index linked and dwarfs the trillion pound on balance sheet. There's the 200k owed to me alone for my 35 years nic contributions and I haven't a penny due from public sector employment schemes.

At the end of the day they will put back and pay back. We will all have to get used to the idea that the State pension hits at 70 and not 60 like it did for the Joan Bakewell generation. and unlike Greece that is trying to hang on 62, we will have to accept it.

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if he can deliver a sustainable budget surplus and start to pay down the debt then even more so

Won't happen. Our current monetary system is debt based and requires private debt to constantly expand. A sustained surplus also means a sustained taxation of the people.

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...We will all have to get used to the idea that the State pension hits at 70...

Then we'll see life expectancy fall back.

My hunch is that the longer you work past 55 the sooner you die,

especially if your working flat out for a tiny crust. Pension crisis solved!

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Who'd have thought it would cost so much to not elect Gordon Brown - *

Think how much we have been paying if he was elected!

* - useless, one-eyed, scots tnuc. Now to be found signing-on at Fife DSS.

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Won't happen. Our current monetary system is debt based and requires private debt to constantly expand. A sustained surplus also means a sustained taxation of the people.

Correct. If the State borrows less then the only way to avert recession is for the private sector to borrow more. But UK household debt is once again 150% of disposable income/GDP thanks to Osborne's endless house price ramping stunts and giveaways. Game over.

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Personally I am not counting on any pensions from the state. So much so that when I left he UK in 2010 I did not continue with NI contributions as so many other ex-pats tend to do.

I think that current demographics have made the whole concept of a pension (state or private) unsustainable.

They are actually dead now, however due to the time lines involved we just do not know it yet.

The release of pension funds (to give HPI one last boost IMHO) and those horrendous off-balance sheet figures allude to this.

Future generations will wonder how we sat back and let it all happen.

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RR I agree...I believe that when most of us get to pension age it just wont exist OR be at such a token level that it may as well not exist AND the govt over the last few years know that, hence the compulsory pensions laws that now exist (or will do for the smallest company by 2018) on your employer...

....that's the difference, if you pay a premium to a private financial institution you can get some form of protection from the FSA, the govt could make a ruling overnight and 'steal' all of your contributions....anybody who pays additional contributions now is a mug!

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