Tuesday, January 18, 2011

Britain's Debt Hits A Trillion

Take a few moments to look at this website which gives details about the debt problem Britain has today. If it doesn't scare you, it should. Because today Britain rolled over the Trillion pound mark. As the website says, this debt is real and it needs to be paid back. This debt is not any different from the credit cards that we all have; eventually it catches up with you.

And if anybody ever tells you that the austerity measures are not necessary or urgent, just pop back and see how much our debt is at that time.


Dave said...

Antony, this is sensationalism and you know it.

Britain's debt is the lowest in terms of GDP than most of the Western world.

The reason why our structural debt is so high - is we had to get into debt due to a fiscal stimulus, (I thought even your limited economic skills could understand this) and bailing out the banking sector.

It is true that it is large - but you have to also look at the US deficit and it is the world's largest economy.

I agreed with the fiscal stimulus because it brought us out of a recession. The increase in VAT has the risk of dragging us back down into a recession because you are causing demand to decrease. Plus, inflationary pressures have set in with inflation at a high.

Thanks George Osborne for increasing VAT. It will cost jobs and hurt our economy.

Antony said...

Hi Dave
Thanks for the message. As my specialism is teaching economic history I don't think I need too many lectures on how the economy works or the pan-historical position we are currently in. It is kind of you to try and justify the situation though.
I fundamentally disagree on one point. The VAT increase will not stop demand; interestingly I was talking at work and not a single person said they noticed or felt the increase. Increasing VAT will cause far far fewer job losses than, say, oooh increasing National Insurance. I mean, only an idiot would tax jobs during a recession. Anyway, I didn't believe that last VAT cut would stimulate the economy and, sure enough, businesses confirm it didn't. A 2.5% rise is quite clever because it will raise a lot without is being felt too much.
I do thank George Osborne (and for that matter Danny Alexander) - for being the most popular Tory Chancellor and for starting to get this country out of the mess we're in.
Even with, with whatever limited skills you have, must realise that paying more in debt than on our schools and hospital is wrong.

Dave said...

I personally feel the impact of the VAT rise based on the fact that I pay more for items that I did before. That's simple logic. To suggest that the VAT increase doesn't have any impact is wrong... I really don't understand why you say no one has felt the effects.

Talk to anyone on a low income and they say that the VAT increase has already had an impact.

Dave said...

Plus even business leaders have argue that the VAT rise will increase inflation.

It is the wrong tax, and will place an unfair financial burden on the lowest paid, and the vulnerable.

Anonymous said...

Also the VAT increase will cost middle class families an extra $448 a year on average.

Antony said...

Anon - how on earth do you calculate that £448 is 2.5% of people's VAT-able spending???? Who spends £17920 on VAT-ed products a year?
And if they do, I am weeelllll below average.

And Dave, do you think business prefers VAT or NI?

Anonymous said...

And it all came about from the greed and speculation championed by Margaret Thatcher and the free marketeers.

Everyone is this country wants more than they need and more than they can afford, so they've been encouraged to borrow as it keeps the wheels of the economy turning. BUT, as even any half-baked economist realises there comes a day of reckoning. Many, many people were predicting the economic collapse (property and mortgage lending problems, and the problems with Lehman Bros and banks crazy fractional reserve rates etc all being a house of cards that would come tumbling down. The economists said all was wonderful though - as they have before every crash in modern times.

You will soon see the effects of VAT. We can all come back here and discuss it later. If yesterday's economic signals are anything to go by, it might be, er, interesting...

Jason said...

I do believe people have to take an individual responsibility as well previous and current governments.

Consumerism encouraged people to spend more and more, and all too often individuals were living beyond their means. This created a debt bubble that imploded.

Now we are seeing the effects of it.

Margaret said...

Antony, do you see yourself as middle class?

Antony said...

Margaret - good question. I don't like the class labels for this reason. By birth working class; Hayes in West London etc etc. By education middle class, by profession I'd say working class but the theorists would say middle. I certainly feel like the "squeezed middle". Former PM John Major spoke of a classless society; maybe I am part of that?

Bob3 said...

Do you feel your are more of a member of the "squeezed middle" because of the VAT increase?

Antony said...

No Bob; I actually think the VAT increase has made a negligible difference to our lives (except maybe for petrol prices).

Bob3 said...

How can you say that Antony. This is definitely a case of having blue tinted glasses.

It is naive to say the least that you think it has made a negligible difference to our lives

For the record, I am on a small income and it is having a BIG DIFFERENCE on my life. If you looked at my latest energy or shopping bills you would know.