Finance, the economy, money, up there as one of my favoured discussion topics, expect much much more. So where to start ? This really could go on for quite some time, its getting late, and I have a TV date with...no, sorry not ready to confess my guilty TV secrets yet ! So just briefly...
I am no expert, but this has been concerning me for years, ever since I first learned whilst at uni that the amount of interest paid annually on UK national debt was well into the billions, and that was just the interest. I remember thinking that just the interest on the debt was almost as much as the higher education budget. The actual amount of debt eclipsed pretty much everything else.
And this week we learn that the country is 800 billion quid in the red ? Doesn’t that scare you just a little bit. And we are now paying 24 billion annually just to have that debt. To put this into perspective, that’s about half the total MOD budget or the schools budget. There’s a whole lot more productive things we could be spending that money on if we didn’t have so many billions of debt to pay interest on.
So pay down the debt, right ? This is just basic budgeting surely. Something I realised a decade ago... I’d be a lot better off if I wasn’t paying 100’s of pounds every month in debt interest. This had to be my priority. So why isn’t it the government or the nation’s top priority ? I know we’re (still) in a recession, but hello, maybe this is part of the reason why. Economists (hi bro) will tell you debt is a good thing; I am not convinced. Not at this level anyway.
And why is national debt always hidden by quoting it as a percentage of GDP ? Just give us the hard figures. Tbc.
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True there will be an effect as direct taxes have to rise and public expenditure is slashed in the next 5 years. The PSNCR will otherwise increase if more cash is not pumped back into the economy.
ReplyDeleteThe problem is as we are in a recession and unemployment is high, income has fallen which means less direct taxes are being paid. People within the economy are saving which is described as a leakage in the circular flow of income model and the less money spent means less ad valorem taxes. So the government is ‘earning’ less whilst their expenditure has increased because they have to pay a high number of benefits. If the government does not have the funds ‘saved’ there is an increase in PSNCR. So we have to borrow money to keep the economy moving. The question is not how much money has been borrowed but what is the significance of the UK’s debt. That’s the real question concerning debt as it is all relative. To calculate use the Debt-To-GDP Ratio.
Caroline Eagle