National Debt.

Which is exactly why the Labour Party are planning to borrow more, even they know that raising taxes will not fund their plans. Oh it will make activists feel good but that’s it, still more borrowing.

We will know tomorrow just which way the country votes, the devil or the deep blue sea!.

Of course, another explanation might be that they cut so many public services and jobs that there was less money in the economy and fewer people paying taxes so they had to make up the shortfall somewhere...

Thank you davidhs for your explanation. So as I now understand it the Conservative government gave relatively well off people.a tax break so they had to borrow money to fund the NHS etc. Where is the logic in that?

Growstuff

Do you not understand that borrowing for the U.K. is just like a house mortgage, your ability to repay the debt plus interest is important. Particularly if the borrowing is to finance non productive spending.
The value of sterling is judged by traders that have no allegiances or emotions, it does affect our cost of living and lifestyle. A weak economy increases living costs greatly because we import so much.

Take the NHS, the spending is about £20 billion/yr (15%) ahead of inflation, the reality is that demand is not being met but demand is elastic and increasing faster than inflation. There are ever more expensive procedures available and ageing population needing more regular treatment.

The facts are that more is being spent on NHS and that is not meeting demand, because demand is open ended and there are always going to be many that don’t get what they want, however much is spent.

David What on earth are you going on about?

I give up!

Are you an old tory voter, David?

The demand for better services has caused them to borrow more, it’s easy to say it has been spent badly, would any one like to suggest who should get less.

I'm struggling to make sense of this. We don't have 'better services', we have worse and worse ones as their budget allocations are cut. They mostly have less money in real terms than they had 10 years ago. And population growth to contend with.

I actually didn't say it had been spent badly, just asked WTF has it been spent on? Because it sure as hell wasn't on public services.

Yes sterling is a sovereign currency but it’s value related to other currency’s varies, in 2008 before the crash it was 1.60 euros, before Brexit 1.30. Dropped as low as 1.09, now around 1.18 euros per £1 that’s how confidence in the UK affects sterling.
In the 2008 crash the Bank of England printed a lot of cash which caused the drop in Sterling, now that we have a Brexit deal (in theory) it will continue to recover somewhat. After that the market will judge the benefits or otherwise of any trade deals.

Maizie commented that the Tories have borrowed a lot in recent years, as an alternative to raising taxes - despite so called austerity.

NO

The demand for better services has caused them to borrow more, it’s easy to say it has been spent badly, would any one like to suggest who should get less. Raising taxes means there is less to spend on goods and services, those with most cash spend most and with so many indirect taxes ( VAT, Rates, Insurance, Cars, Fuel ) the net gain is very small. A lot has also been spent on infrastructure, renewables, railways and other large projects

Our current borrowing of around 90% of GDP is manageable.
Total U.K. assets are around £7 trillion we are borrowing £2 trillion, less than 30% of assets. We need to work harder but it’s not a problem the U.K. is solvent.

Exactly! Going out to work now, so no more replies. I really do wonder what it takes to get people to understand how a national economy works. Sadly, I don't think some politicians understand either - and those who do, aren't advertising the fact because they have their own agenda.

How come if debt national debt is so bad that Japan hasn't gone "bankrupt"?

Probably because there's no 'bank' to 'rupt'! Countries with their own sovereign currency don't have a fixed amount of money (I do know that you know this already, gs . They can issue what they need to cover their interest repayments.

The example of Japan tells us that the Labour party's spending plans won't ruin the country

The UK has a long way to go before it hits rock bottom on debt.

Japan's debt to GDP ratio is 238.2%. The US's ratio is 106.1. The UK's ratio is 85.9% (2018 stats).

How come if debt national debt is so bad that Japan hasn't gone "bankrupt"?

Thanks, David. So the national debt is used for the most part for UK citizens' safe savings and investment. It's actually been happening for 100s of years. Nothing to get too worried about in a way.

But, the interesting question is the one that boat asked earlier. We can see from the chart I posted that borrowing seems to have increased hugely under the tories. Where did the borrowed money go? Because with savage cut backs in government spending on public services it certainly wasn't going there.

Of course, the borrowing on the chart is expressed as a percentage of GDP; if GDP has been falling at the same time the amount borrowed might be unchanged but it would show up as a greater percentage of the reduced GDP...but I'm not sure that that would be the whole story. What have the tories been spending it on?

I think people should rest assured that the National Debt is not so much a huge burden on future generations as a safe place for savings/investments.

Sterling is a sovereign currency, David, the government can issue as much as it likes to cover its obligations, so no, it's not at all likely to default.

Who are we borrowing from?

Any one who buys Government Bonds, Gilts, and other investments, they are generally seen as a safe investment at a low interest rate. You and I can buy them so can Pension Funds, Foreign Governments, Overseas Banks, sterling is not a reserve currency but it is very close, the UK is very unlikely to default.
The higher the confidence the lower the interest rate needs to be, which is why the Bank Of England likes avoid any downturn that would mean higher rates to attract money.

I'd have voted for the Loony party too.

How sad to see this country reach rock bottom !!

It's that high because the government hasn't taxed those who could afford it enough.

ah well, they should just get a Pay Day Loan hey ;)

we are borrowing off others

Do you know who we are actually borrowing from, Davidhs?

Does anyone know who we are 'borrowing' from?

I don't expect I'll get an answer, but, heigh ho, I try..

Meanwhile, I'll leave this here, UK debt as a percentage of GDP. From 1993 - 2015. So you can judge which government has 'borrowed' the most.

That was the manifesto plan and if you look at the published figures they did spend around that amount which brings the current national debt to nearly £2,000 billion - £60,000 per household. All of this despite austerity.

It is spent on running the NHS, Schools, Defence and all the other costs of running the country, we are borrowing off others to pay for our lifestyle in the UK, because we don’t want to pay ourselves.

We pay interest on that debt, currently around £40 billion per year

Gagajo

That's very interesting but what on earth did they spend it on?

The vast majority of the population don't seem to have had any benefit from it and they can't have used it all on tax cuts for the 5% on high incomes.

Labour will borrow a hell of a lot more.

Just imagine how large that bill will be if Labour get in.

If only they were an option Septimia or the 'Standing at the back looking stupid party'; any Black Adder fans will know what I mean

No way am I voting Labour - not with Corbyn in charge and the candidate we have (her predecessors were OK).

So I'm in a quandary.

Where are the Monster Raving Loonies when you need them?