UK National Debt revised to £4trillion by ONS

Discussion in 'Politics' started by B_crackoff, Jul 13, 2010.

  1. B_crackoff

    B_crackoff New Member

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    I think this says it all, & underlines why the pension age should be raised now, incremental tax benefits abolished & public sector final salary schemes abandoned.

    I've literally been posting about this for 5 years, & when you consider how many retire abroad, which destroys the entire economics of the pension system...

    It would take a rise of 30p in the £ to pay this off, yet we're still giving £15Bn to the EU, & with other grants about £15 Bn for overseas aid annually too. We just can't afford it - & too many have their heads in the sand.

    Britain’s debt: The untold story - UK Politics, UK - The Independent
     
  2. dandelion

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    The article misses the point: the only way that future pensions can be paid is by taking a cut from those earning at that time. If pensioners are not creating wealth, then they are getting it from those who are. It makes no difference if they put money in a pot 30 years earlier, which bought them a share of a company, or if the government now taxes that company and passes on the money to pensioners. The issue is not whether people now are placing money in pension schemes, but what the total amount of pensions to be paid will be at any future date.

    The real question is probably, will the size of the economy be bigger or smaller in 30 years time if pensioners now a) put money in a pension fund, or b) spend it. If they put it in a pension fund, then I guess share prices will rocket (as has been happening), but little real economic growth will take place. If they spend it, then someone gets employed and makes something tangible.

    If there is an issue then it is about unrealistic expectations by future pensioners. Or maybe the expectations are not unrealistic. It depends on what share of the economy they will be in that 30 years, not what funding is allocated now.
     
    #2 dandelion, Jul 13, 2010
    Last edited: Jul 13, 2010
  3. B_mitchymo

    B_mitchymo New Member

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    The debt is never going to be dealt with until world governments kick banks into touch and stop borrowing from them.

    The government should set up its own bank and have workers wages paid into accounts with the government bank without usary. In so doing, you stop the debt from ballooning any more by bursting the greedy bankers bubble and in the process free up the public purse.
     
  4. B_crackoff

    B_crackoff New Member

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    Quite true. It would get rid of domestic inflation entirely too. You'd need self contained economies that would trade via exchanges of goods & services though.

    Dandelion - I think you've missed the point.

    That pension liability is what the total value is NOW.

    Treat it like a mortgage, but with interest payments escalating.

    Just to pay off the national debt with zero interest in 25 years would cost £160Bn/ annum. Our current deficit is already £160Bn/annum. To pay off either we'd need a hike of £0.40/£1 income tax, or £0.80/£1 for both!

    I have simplified this, but unfortunately, all those post war baby boomers are retiring now, so the crystallisation of liabilities will rapidly occur, causing more money to be borrowed, & more interest paid to service that new debt.

    Labour had 13 years to do something about this. Ultimately, the government must be hoping for a pandemic that is severe among the elderly, or a war!

    The only way out of this without draconian cuts is to inflate, inflate, inflate, & remove guarantees. It's not like anyone put any money away for this.

    It literally does put the younger generation in hock to the political expediency of previous generations.
     
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