Saturday, 15 October 2011
How very true and we have to ask why the great British public are not being told the truth by any means?
To partly answer question, the off balance sheet liabilities are by no means being costed in. To
take just one example, in March 2008 UK Actuary Department stated that:
Unfunded Civil Service Pension Liabilities are £770 billion
(i.e. 58% of GDP, not captured by debt/GDP ratio)
Another recently released figure is that the average personal debt is a fraction under
10,000, NOT including mortgages.
The truth of the matter is our finances are in a far worse state than Greece.
The Public is just not being reminded the specifics of just how bad our NATIONAL DEBT is.
Liam Halligan has also addressed this issue in his latest article 9.10.11,
some of the key points:
Government spending in August was 7.2% higher than the same month
last year and during the past 12 months, public expenditure outstripped
that of the year before after inflation. How does this fit with "the cuts" ?
The UK borrowed £150 bn. in 2009/10 and 2010/11 and will borrow
£125 bn. this financial year - 6/8 times average annual borrowing
during the previous decade.
The entire fiscal debate is couched in terms of "paying down the deficit",
this is just the nation's credit card bill not the mortgage, which is the real
concern ! Net public debt is set to reach £940 bn. by the end of 2011/12,
a 62% nominal rise in 36 months ! By 2015/16, even with the
"austerity plan", net debt will be £1,500 bn. according to the Treasury.
By 2015 debt servicing costs will be £67 bn. a year or 10% of the tax
take....these shocking figures are likely to be under estimates, given the
assumptions on government "savings" and, most crucially, benign gilt
rates.
Include the cost of "financial interventions", such as bank (and EU ?)
bail outs and net debt is already £2, 266 bn. - Treasury fine print !
This does not include other "off balance sheet" liabilities, such as
public sector pensions (£1,100 bn.?) or PFI schemes.
If the UK's creditors lose confidence, debt service costs will spike.
Labour (and the Unions) say the UK's cuts (prefer savings) are
happening "too far and too fast", in reality they are not happening
at all.
As always, there is much more in the way of honest and expert
Subject: UK NATIONAL DEBT BURDEN
Some interesting points from Damian Reece, DT Business 6.10:
PUBLIC SECTOR NET DEBT 2009/10 £760 bn.
2010/11 £909 bn.
2011/12 £1.0 trillion
2015/16 (est) £1.4 trillion
Not clear if this includes off balance sheet liabilities.
Interest on this debt now forecast to be £50 bn. this year.
Statement in the Prime Minister's conference speech: "The only
way out of a debt crisis is to deal with your debt..."
So far the only thing the Coalition have achieved is to cut the
rate of increase in spending...you may be dealing with your
debt at home, but the government has not even begun to deal
with our debt as a country.
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