Jump to content
House Price Crash Forum

UK government debt hits £2tn for first time


Recommended Posts

  • Replies 69
  • Created
  • Last Reply

Top Posters In This Topic

So recent governments have spent £100,000 or so of my money (or at least on my behalf) wthout my permission.  Should not be allowed. 
 

Perhaps any future national debt beyond £2tr. should be put to the population in a referendum, and the government forced to curtail spending unless approved?

Link to post
Share on other sites
53 minutes ago, 14stFlyer said:

So recent governments have spent £100,000 or so of my money (or at least on my behalf) wthout my permission.  Should not be allowed. 
 

Perhaps any future national debt beyond £2tr. should be put to the population in a referendum, and the government forced to curtail spending unless approved?

It's not your money. Your permission will never be sought or needed to spend it. You manifestly know nothing about economics if you believe that govt borrowing should be curtailed during a depression.

Link to post
Share on other sites
51 minutes ago, Social Justice League said:

How can you be in debt if you can legally print your own money?

The idea is government spending is financed by a mixture of tax receipts, borrowing and money creation to control inflation. 

The DMO has a mandate to ensure that any overshoot in government expenditure at a given point in time is funded by selling government debt, which people are buying in droves at the moment. Then the government can decide whether it wants to repay using tax or other receipts, refinance (ie it issues another round of bonds to pay off the previous round) or just print some money and pay it down. 

At the moment, government borrowing is really cheap. Some bonds on a long enough timeline are now going at a negative rate (ie people are paying us to look after their money for a bit) and it doesn't look like changing for a while so there's no real incentive to start desperately paying down debt. 

The real question is how much interest do we have to pay to service it (I.e. how much of our budget actually goes away from public services and on returns to the owners of this debt)? Current estimates are that our debt costs us about £45bn per year out of an estimated 2021 expenditure of £900bn, so around 5% (or £1 in every £20 we spend goes on finance costs). 

Doesn't seem horrendous to me when you consider what we actually use debt for, despite the moral panic. The real determinant of whether or not it's sustainable is debt as a proportion of GDP (I.e. how big is the debt vs our whole economy, equivalent of comparing your salary to your mortgage). Tories have performed poorly here but will be banking on a surge in inflation to grow salaries and other assets prices and make the debt more manageable by comparison. 

Either way there will be a lot of wailing and gnashing of teeth over "number go up" but without context it's just that; a big number. 

Link to post
Share on other sites
1 hour ago, winkie said:

 

Housing crisis is discussed from 1:01 to 1:06.

Alistair Darling, George Osborne and Phillip Hammond answering questions. As expected a largely London centric view and zero recognition of any culpability for adding to the housing crisis under their watch, although credit to Alastair Darling for recognition that there is a national crisis and an interesting view on Air BnB within cities such as Edinburgh.

Link to post
Share on other sites
5 minutes ago, Switch625 said:

Housing crisis is discussed from 1:01 to 1:06.

Alistair Darling, George Osborne and Phillip Hammond answering questions. As expected a largely London centric view and zero recognition of any culpability for adding to the housing crisis under their watch, although credit to Alastair Darling for recognition that there is a national crisis and an interesting view on Air BnB within cities such as Edinburgh.

AD got respect for, PH average pass, GO go back to school.;)

Link to post
Share on other sites

Crossrail  even longer delays.....how much more will it cost?.....A303 how long before any improvement to keep traffic flowing will ever get started.....nothing ever gets done, if it does it takes three times as long and three times the budget......we are not moving, we have stood still or regressed.......all the created money where has it gone?;)

Link to post
Share on other sites
On 8/21/2020 at 9:28 AM, zugzwang said:

It's not your money. Your permission will never be sought or needed to spend it.

And yet my offspring, family and I will all have to contribute to paying it back (unless we emigrate). 

 

On 8/21/2020 at 9:28 AM, zugzwang said:

You manifestly know nothing about economics if you believe that govt borrowing should be curtailed during a depression.

I do not believe we are in a depression. Also the vast majority of this debt was accrued during the “ good times”. 

Link to post
Share on other sites
On 8/21/2020 at 10:04 AM, Hullabaloo82 said:

At the moment

Yes, at the moment

What happens when IR's have to go up to 20% or more to fight inflation from the all the printing as happened in the 70's, 80's and 90's?

You then have a situation where the government's interest bill will shoot up to ridiculous proportions and consume the entire budget.  Not so clever then taking on all that debt, is it ?

We're headed for national bankruptcy and ruin.

Edited by Warlord
Link to post
Share on other sites

...but but sOcIaLiSt labour would spend everything and leave us in misery...

National Debt 500Bn in 2010, now 2Tn.  The result of 'responsible' Tories heaping misery through 'austerity'.  Our national debt is bigger than the entire FTSE - we'd be better off surrendering to Apple

Blair and Brown look parsimonious compared to this lot.

 

Link to post
Share on other sites
On 21/08/2020 at 08:57, Social Justice League said:

How can you be in debt if you can legally print your own money?

Because if you want people to give you real stuff in exchange for your money you have to be careful not to print too much of it.

The government could clear all its debts with the printing press - once.

But don't then think anyone would ever again accept a UK government bond in exchange for anything, just as you or I wouldn't touch an Argentinian or Venezualan bond with a bargepole.

Link to post
Share on other sites

Interesting articles about one third people being forced to work while on furlough and a further third ignoring the rules and working anyway. 

 and HMRC now inundated with whistle blowers.  

90 days to "correct errors" or fined double. 

So it looks like HMRC could be calling back a lot of that furlough money almost immediately from the same people they gave it to, not from the general taxpayer. 

(And the way I was explained the rules, if you falsely claimed for one person, none of the other employees could be claimed for either, and you have to repay all of it)

I'm inclined to view this as a political decision,  and a way of controlling the number of corporate bankruptcies  ( depending on how things pick up). 

Link to post
Share on other sites

Blimey, was playing with the figures on this graph. 

https://tradingeconomics.com/united-kingdom/government-debt

UK Debt

Debt increased by 200Bn in only the last 3 months!  It took twenty years (1980 to 2000) and four years (2016 to 2020) to rise by the same £200Bn amount. 😲

I really don't think this is going to end well. 🤬

Edited by bomberbrown
Link to post
Share on other sites
48 minutes ago, bomberbrown said:

Blimey, was playing with the figures on this graph. 

https://tradingeconomics.com/united-kingdom/government-debt

UK Debt

Debt increased by 200Bn in only the last 3 months!  It took twenty years (1980 to 2000) and four years (2016 to 2020) to rise by the same £200Bn amount. 😲

I really don't think this is going to end well. 🤬

If we're not careful we could be talking soon about really big numbers!  🤨

Link to post
Share on other sites
On 21/08/2020 at 09:28, zugzwang said:

It's not your money. Your permission will never be sought or needed to spend it. You manifestly know nothing about economics if you believe that govt borrowing should be curtailed during a depression.

BUT....they dont pay back in the good times...they just borrow MORE in the bad times.

Link to post
Share on other sites
23 hours ago, msi said:

...but but sOcIaLiSt labour would spend everything and leave us in misery...

National Debt 500Bn in 2010, now 2Tn.  The result of 'responsible' Tories heaping misery through 'austerity'.  Our national debt is bigger than the entire FTSE - we'd be better off surrendering to Apple

Blair and Brown look parsimonious compared to this lot.

 

Blair and Brown were two extremely lucky politicians to be in power during such an economically benign period.

Edited by Roman Roady
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 418 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.