UK national debt

[JohnH]

For the first time today, the treasury is going to publish a balance sheet that shows the state of finances spanning the entire government. Apparently it's going to make for some grim reading...

http://www.independent.co.uk/news/uk/po ... 12695.html

...even though it might not include the nation's £2.7 trillion state pension liability, which the Institute of Economic Affairs thinks should be on there as well...

http://www.telegraph.co.uk/finance/econ ... llion.html

Gulp.

 

[mattbrown]

i find burying my head in the sand solves all my problems, if you ignore it, it goes away, just look at Greece (and soon to be Italy)

 

[AR-CoolC]

We ended up talking about this at work a few days ago and came up with the following analogy.

£1M cash is a large holdall

1000 holdall's makes £1B = lorry full of cash.

1000 lorries makes £1T

Now double it :shock: Just try and imagine 2000 lorries parked end to end, that's about 2 miles!

 

[JohnH]

i find burying my head in the sand solves all my problems, if you ignore it, it goes away, just look at Greece (and soon to be Italy)

If Greece can't get its citizens to pay their taxes and the EU/IMF won't lend them anymore money, I wonder what happens when a country becomes insolvent. Do all of the public sector's bills (including pensions, benefits and the wage bill) just stop being paid? Does the government just say "Sorry, that's it folks -- you're all on your own"? :?

According to the Office of Budget Responsibility, the Treasury needs to cut/tax half as much again as they already have been doing to avoid a Greek-style (oo-er missus) economic meltdown...
http://www.independent.co.uk/news/busin ... 13297.html

Now double it Just try and imagine 2000 lorries parked end to end, that's about 2 miles!

Okay, I'll try to imagine 2000 lorries, each containing a billion pounds...

*smoke pours out of ears*

 

[perry]

That's what a billion dollars looks like . I would post the photo but it would take the rest of the day

http://www.iheartmyart.com/post/9133144 ... 12-pallets

Who do we owe the money to ? can't we just send the boys raannd ?

 

[hamster]

If Greece can't get its citizens to pay their taxes and the EU/IMF won't lend them anymore money, I wonder what happens when a country becomes insolvent. Do all of the public sector's bills (including pensions, benefits and the wage bill) just stop being paid? Does the government just say "Sorry, that's it folks -- you're all on your own"? :?

That's exactly what has happened in some US states this year - public offices simply close and employees don't get paid.
The same happened in Russia in the 1990s - state employees and teachers etc didn't get paid for several months, pensions were unpaid etc. People got by as best they could. :shock:

 

[JohnH]

Who do we owe the money to ? can't we just send the boys raannd ?

The country has to find trillions of pounds to cover future payments of state pensions and public sector pensions. It's become very difficult to do that because...
a) There was a big increase in the number of births after the war (the so-called 'baby boom') and all of those baby boomers are now coming up to retirement age, so the number of pensioners is about to 'boom'. As those people retire, there will be fewer people paying taxes into the system and more people taking money out.
b) Previous governments have delayed implementing much-needed pensions reform because it would result in unpopular headlines.
c) Gordon Brown introduced a tax on the interest that private pension schemes earn and resulted in many schemes being either not offered to new employees or wound up completely.
http://www.telegraph.co.uk/news/uknews/ ... llion.html
d) Labour agreed pension deals with public sector workers which the private sector is now going to struggle to afford.
http://www.thisismoney.co.uk/money/news ... f-all.html

That's exactly what has happened in some US states this year - public offices simply close and employees don't get paid.
The same happened in Russia in the 1990s - state employees and teachers etc didn't get paid for several months, pensions were unpaid etc. People got by as best they could. :shock:

I didn't know about the US states, but yes, you're right -- I remember Russia defaulting on its debts in 1998 while teachers and doctors worked for months without pay.

Well, Greece might have that to look forward to...

 

[perry]

Thanks John , makes a lot of sense . Shame we owe money to ourselves though

Not owning a telly and the radio at work only playing music has meant I'm pretty much oblivious to things like this , I was unaware that I owe myself so much money . I'm usually a lot more careful about lending to shady types who look like me .

 

[JohnH]

I was unaware that I owe myself so much money . I'm usually a lot more careful about lending to shady types who look like me .

Once upon a time, workers outnumbered pensioners 8 or 9 to 1 and more money was paid into the system than was taken out. Previous governments saw this "surplus" of money and thought to themselves "Aye aye!!" and started to spend it.

Now the time's come for that "surplus" to do the job for which it was intended.... and it's all gone.

So "plan B" is to pay our current pensioners using money that's borrowed from workers who haven't even been born yet.

It's an absolute ****ing shambles.

 

[perry]

It's one hell of an excuse not to have children ; my unborn 2.4 owes my grandad a pension :?

Like one of those one hand clapping , tree falling in the forest head clearing paradoxes .

Scrap the nhs and you save even more , if you know what I'm saying