If Labour remains in power, will the UK go bankrupt like Greece?

[RonJeremy]

So you think cutting back on health provision is a vote winner? or pehaps you would cut a load of jobs in the borders agency?

 

No but the NHS could be streamlined massively. There are so many departments with people doing jobs that don't matter. The UK border agency, I have no doubt, will be the same. This sector is unproductive and expensive (and expansive for that matter) much of it self-serving.

 

Yes there do need to be cuts - we are nearly bankrupt and have been made so by this government. The greek economy is even worse, but that is because they have even further left wing govts with stronger trade onions destroying the country. What a bunch of short sighted muppets.

[Rupert_Baehr]

YIPPEEE.......they have knocked 100 grand off my mortgage!:hihi:

 

Not so, unfortunately. The National Debt is rather bigger than 60% of GDP, (that's he bit the government are prepared to admit to ... they conveniently 'forget' all the money they have to repay for PFIs and the money they will have to find for pensions.)

 

The National Debt (along with the budget deficit, which makes that debt grow at an amazing rate) is only one part of the problem.

 

There's also the small matter of 'personal indebtedness' which totals more than £1.46 Billion.

 

Each adult, on average owes over £30,000 including mortgages which represents 129% of average earnings.

 

... Projections for the 2014-15 fiscal year outlined in the December 2009 pre budget report show that this average household debt burden is likely to increase to £116,493, which is double the levels of household debt reported in the year to January 31st 2010.

 

Weakness in the economy continues to have an influence on everyday lives as the figures show that a property is repossessed every 11.4 minutes and 1,841 people are made redundant every day. In addition, someone will be declared bankrupt or insolvent every 3.69 minutes, on average.

 

This government's answer to the recession was 'Let's spend our way out of the recession using money we don't have.' If a part of the reason for the global financial problem was 'too many people borrowing too much money which they couldn't afford to repay' then how does borrowing more improve things?

[Wildcat]

Cutting back the public sector may not be a vote winner, but neither is bankrupting the country.

 

Of course, as we've seen before in the early 80s, people never blame the politicins who cause the bankruptcy. They reserve their bile and hatred for the one who has guts enough to perform the reconstruction. Is it any wonder that few, if any, candidates are brave enough to say they'll actually fix the current problems?

 

It was under Heath that the crisis in the 70s began, Wilson and Callaghan were the ones that averted that crisis through their prudence.

[RonJeremy]

It was under Heath that the crisis in the 70s began, Wilson and Callaghan were the ones that averted that crisis through their prudence.

 

This is laughable revisionism of the kind you would expect from the Soviet Socialist era or present day Socialist Cuba - Orwellian I tell you - even the BBC and its far left leanings doesn't pretend this is the case.

[Wildcat]

This is laughable revisionism of the kind you would expect from the Soviet Socialist era or present day Socialist Cuba - Orwellian I tell you - even the BBC and its far left leanings doesn't pretend this is the case.

 

Here is a little graph that will show you when the last time public expenditure went up at the same rate as it has done recently.....

 

No not under Callaghan... It was under Edward Heath.

 

http://www.owen.org/wp-content/uploads/100125-Public-spending-post-bureaucratic.pdf

 

before accusing people of revisionism, perhaps an elementary understanding of history might be helpful?

[atticus]

The only way the UK is in danger of going bankrupt is if we dive in to another recession and this turns in to a depression as it did in th 1920's.The mistake made then ,by the US and Europe was to cut back spending too hard and too quickley and the economy stagnated.

Government spending does need cutting,but not before we are well out of recession.

[RonJeremy]

Here is a little graph that will show you when the last time public expenditure went up at the same rate as it has done recently.....

 

No not under Callaghan... It was under Edward Heath.

 

http://www.owen.org/wp-content/uploads/100125-Public-spending-post-bureaucratic.pdf

 

before accusing people of revisionism, perhaps an elementary understanding of history might be helpful?

 

It depends on what it was spent. Your graph proves nothing

[Rupert_Baehr]

the uk economy is in much better shape than the greek one and should recover far better, our debt may be large but the repayment dates are many years into the future. much of the greek debt needs to be paid off in a few weeks...

 

The total sum owed by Greece, Spain, Portugal and Ireland is about £520 Billion - roughly 8% of the GDP of the Eurozone.

 

There is considerable disquiet in some parts of Europe about bailing out the Greeks. Somebody told me yesterday: "The reason we Germans have to work until 68 before we can draw our old age pension is so that the Greeks can retire at 58."

 

The EU seems to be unwilling to expel the Greeks from the Eurozone, but if the Greek people refuse to comply with the conditions laid down by Europe and by the IMF, then presumably that could happen. In the meantime, Greece is backed by the German economy.

 

The total sum owed by the UK is about £1,340 billion, which is 103.5 per cent of the UK GDP. (This figure includes all the public sector pension liabilities such as pensions, and Private Finance Initiative contracts e.t.c [Northern Rock liabilities].)

 

Unfortunately, people are starting to ask for insurance cover on British bonds, because they are (Understandably) concerned that UK inflation will rise (considerably) and the face value of the bonds will fall. The insurance premium will be added to the debt, so the cost of borrowing - for the British Government - is likely to rise.

 

If the Pound falls in value against the currencies of the rest of the world then imports (including oil and food) will cost more and prices will rise. If the government decided to print money, then although that will indeed reduce personal indebtedness (inflation will reduce the real size of your mortgage) it will make borrowing even more expensive and the interest rates on mortgages (and everything else) will soar. (Like they did in the 70's.)

 

...if the incoming government balances income and expenditure over the next few years then we should be ok.

 

Unfortunately none of the political parties has any intention of balancing income and expenditure. Labour have said that they will 'only borrow half as much' in 4 years time. - And to meet that target they need very optimistic growth rates.

 

Should they get back into power, then in 4 years time they will have borrowed more than the total borrowed by all governments since Julius Caesar and the annual interest payable on the loan will be more than the present annual defence budget (unless, of course, interest rates rise. In which case it will be rather more. )

 

...our current financial situation may not the the best its ever been but its not terminal and there is no need for the amount of panic that the media and some politicians are whipping up

 

Life is probably going to be hard irrespective of who gets into power.

 

We will all probably still be rather richer than at least 90% of the inhabitants of the planet.

[wednesday1]

The only way the UK is in danger of going bankrupt is if we dive in to another recession and this turns in to a depression as it did in th 1920's.The mistake made then ,by the US and Europe was to cut back spending too hard and too quickley and the economy stagnated.

Government spending does need cutting,but not before we are well out of recession.

 

That is the danger with the Conservatives. They will want to cut as deep as possible as quickly as possible in order for Cameron to be able to offer tax cuts to bribe the electorate before the next election.

[Wildcat]

It depends on what it was spent. Your graph proves nothing

 

Look up the collapse of the Bretton Woods system and you will see the parallels between 1973 and the current crisis.