Britain’s Trillion Pound Horror Story…

November 12, 2010

Anybody catch this on channel four last night?

The film alleged that the UK’s national debt actually stands at an estimated £4.8 trillion and is still rising.

That’s 333% of GDP.

Or £77,000 of debt for every man, woman, and child in the country.

Contrasting, of course, with the official figure of 54% of GDP – the difference being the official figure makes no allowance for liabilities such as public sector pensions and state pensions, as well as an allowance for the bailed-out banks.

Basically what it means is we’re spending our grandchildren’s inheritance. The current amount of benefits paid in the UK exceeds the entire tax revenues collected…so we have to keep borrowing.

We are all, if we did but know it, living on borrowed time.

The “official” deficit is only to be partly explained by the onset of recession. The ratio of government spending to GDP rose (official figures) from 41.8% in 1999, to 45.8% in 2007 before the downturn commenced (God bless Tony, Gordon, and their chums).

There has to be serious doubt whether deficits of this magnitude can be financed in a non-inflationary manner without substantial capital inflow from abroad. And why would such inflows be forthcoming with the British economy straining under a tax burden that is judged extremely high by international standards?

Oh, well, I s’pose this means I have to be more frugal in future, eh? Cut down on the breakfast gin, perhaps? On the other hand, if we’re living on our “grandchildren’s inheritance”, stuff ‘em, we’re enjoying their money…so, our wholehearted thanks to the future (poverty-stricken) generation, from all us greedy, smiling bastards  socially aware individuals!

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