The Uk Government balancing it's financial books.

Without shareholders some businesses wouldn’t exist. Shareholders put money into a business on the understanding that they will receive a return. Other businesses such as law firms are owned by the partners who are in business to make a profit. Of course not everyone can afford to purchase from all private businesses. That way lies the communist state.

Dinahmo

Nearly every country has debt. Here are 2 tables showing that of the top 20 countries with the highest.

Top 20 Countries with the Highest National Debt:

GDP (UN 2021)
Japan255.24%
Greece167.97%
Singapore167.89%
Italy143.73%
Bhutan123.45%
United States123.28%
Laos121.75%
Bahrain121.17%
Barbados115%
Cape Verde113.09%
Maldives110.25%
France110.03%
Portugal108.35%
Spain107.28%
Suriname106.99%
Canada106.38%
Belgium105.98%
United Kingdom104.14%

Debt in millions

United States$29.46 Mn
Japan$13.05 Mn
China$10.12 Mn
France$3.33 Mn
Italy$3.17 Mn
United Kingdom$3.04 Mn
Germany$2.97 Mn
India$2.38 Mn
Canada$2.24 Mn
Spain$1.69 Mn
Brazil$1.50 Mn
Australia$954,634
South Korea$929,584
Mexico$746,964
Iran$674,167
Singapore$650,630
Belgium$649,405
Netherlands$530,350
Indonesia$488,638
Greece$431,474

These are from World Population Review.

It seems to me that the UK is doing reasonably well compared with some of the other countries so what's the fuss?

The UK debt has fluctuated over the centuries, due mainly to wars but also the sterling crisis in the 70s. By the beginning of the 20thC its was around 30% . By the end of WW2 it had reached over 200% of GDP. It fell to 29.2% by 2002 and then increased to 56.8% by July 2009. This increase was mainly down to public spending - on health, education and social security benefits.

Despite the Tories austerity programme it reached 104.14 the lowest of the top 20 countries with the highest GDP %.

Given those figures Labour should be given a chance to prove that they can do better with the economy than the Tories.

This is really interesting. Belgium is heavily in debt for the size of the population, which did surprise me.
Given there’s no evidence that the economy has performed worse historically overall under Labour governments, I’m looking forward to an era of greater welfare spending and higher taxation for the ‘Im alright Jacks.’.

Germanshepherdsmum

Without shareholders some businesses wouldn’t exist. Shareholders put money into a business on the understanding that they will receive a return. Other businesses such as law firms are owned by the partners who are in business to make a profit. Of course not everyone can afford to purchase from all private businesses. That way lies the communist state.

A trifle disingenuous, GSM when you consider that most shareholders have not bought newly issued shares but have purchased shares from existing shareholders and the purchase money goes to the seller of the shares and nowhere near the company which originally issued them.

As I understand it there is a significant difference between the accounting definition of 'balancing the books' and the political definition.

In accountancy all incoming and outgoing monies must be, well, accounted for. 'Balanced' accounts could show.a profit or a loss or break even. One would expect national accounts to 'balance' in this way otherwise there would be something wrong with the national bookeeping.

Politically, ' balancing the books' covers an expectation that the state's outgoing spending matches its incoming revenue, i.e it breaks even. This isn't particularly necessary. As Dinahmo's figures show, states can manage perfectly well when running deficits.
Looking at trends over time it is noticeable that running a surplus is frequently followed by a depression! But luckily, running a surplus doesn't often happen...

With the capitalist system though, there is an inevitable business cycle. So a period of expansion resulting in higher revenue collection perhaps giving the government a surplus, but this expansion will always be followed by a recession and less revenue to the government.

Interesting piece on radio 4. Re concern over world debt.

www.bbc.co.uk/sounds/play/m001styj

If the shares were not purchased when issued would the company exist? We have had this argument before and I have told you that my shares were purchased direct from the company, not on the market.

Politically, ' balancing the books' covers an expectation that the state's outgoing spending matches its incoming revenue, i.e it breaks even. This isn't particularly necessary. As Dinahmo's figures show, states can manage perfectly well when running deficits.

I agree it isnt particularly necessary.
In one particular year of a household budget, that is not always the case, if say you have taken out a loan for eg a house extension etc.

I disagree about the Dinahmo figures though.
Italy and Greece - well known countries for running into huge financial difficulties.
US - its national debt is now nearly the same percentage to GDP as it was in the 2nd world war years. Anyone fancy having the same national debt as the US? No, I thought not.

Germanshepherdsmum

If the shares were not purchased when issued would the company exist? We have had this argument before and I have told you that my shares were purchased direct from the company, not on the market.

I said 'most' shareholders' not 'all'.

I'm saying that to imply that when a share is purchased the money always goes to the company is painting a false picture.
It is not an argument, it's adding information so people don't get a wrong impression of share purchasing.

How about Japan, fancythat? Is Japan a financial basket case?

Singapore? That's what some Brexiters wanted us to be like - Singapore-on-Thames... 🤔

I know not a thing about Singapore.

Japan - went from being a financial superpower in the 80s, if my memory is correct, to a backwater now[apologies if I am wrong, to the Japanese].
Not sure I like my own words, but cant think of a better way of putting it.

So to my mind, no, I definitely would not want to be financially where the most heavily indebted countries are.

Again, think about household finances.
Yes, a big borrow can work out ok 10 or 20 years down the line. But it is a big financial risk, that does not always pay off.

petra

Interesting piece on radio 4. Re concern over world debt.

www.bbc.co.uk/sounds/play/m001styj

Sorry, I can be lazy about videos[I tell the kids not to send me ones more than 3 mins long].
Care to summarize what it says?
Obviously you dont have to.

Casdon
Given there’s no evidence that the economy has performed worse historically overall under Labour governments

Is that true?
I dont have anything to back it up,
But the perception by many is that Labour are the [over]spend Party.

fancythat

I know not a thing about Singapore.

Japan - went from being a financial superpower in the 80s, if my memory is correct, to a backwater now[apologies if I am wrong, to the Japanese].
Not sure I like my own words, but cant think of a better way of putting it.

So to my mind, no, I definitely would not want to be financially where the most heavily indebted countries are.

Again, think about household finances.
Yes, a big borrow can work out ok 10 or 20 years down the line. But it is a big financial risk, that does not always pay off.

Why on earth should anyone think about household finances in this context. A country is not a household, nor is it a business.

It has a power which neither has; it creates and issues its own money. And it doesn't have to make a profit.

I defintiely think of it as like a household budget. Agreed not a business.

Printing money has limited use.
It can backfire hugely.

Perhaps this is all why people look at the economy in different ways.
If it isnt looked on as having to at least loosely balance, and people think, well just print some more money, it can indeed be looked on as, well why not spend spend spend.
And as Labour are deemed to be more spend than the tories, well in that case vote Labour. Happy days! Downpour of money. Money on trees.

Printing money has limited use.
It can backfire hugely.

Technically very little money is 'printed' these days. It's created by key strokes on a computer. It's use, far from being limited, is common and extensive. Commercial banks 'create' money every time they make a loan.

The Bank of England has been creating money for decades. That is how the supply of money in the UK expands to serve the needs of its ever increasing population; if it didn't increase the supply of money the amount available to each citizen would get smaller and smaller as the population grows.

The BoE creates the money to buy bonds when it undertakes Quantitative Easing. Without QE to bail out the banks after the global financial crisis a very large portion of the population would have found themselves with empty bank accounts. Without QE during the covid crisis there would have been no money for the furlough scheme, for purchasing supplies of PPE (at vastly inflated prices) for running the Test & Trace operation, for the vaccine rollout and for help for businesses and some of the self employed.

QE has cost us nothing. As I explained earlier, it is a purely nominal debt. Nor has it caused inflation.

Viewing a national economy like a household economy is absurd.

If you know of households which can create their own money you'd better inform the police. Counterfeiting is a crime...

I can now see that if people do not view the national economy like a household economy, and view it more like the cookie jar, why people behave as they do towards how they want a government to behave.

There is nothing pure about QE
I do know [some] about creating money.

It can lead to inflation, but not always. Depends how the QE is used, it seems to me.

fancythat

Casdon
Given there’s no evidence that the economy has performed worse historically overall under Labour governments

Is that true?
I dont have anything to back it up,
But the perception by many is that Labour are the [over]spend Party.

Yes, it’s true. There is a lot of information online, here is one from an unbiased source.
theconversation.com/labour-are-much-better-at-running-the-economy-than-voters-think-new-research-162368

Depends how the QE is used, it seems to me.

Well, there you have it, fancythat. It's not the actual money creation that is the problem, it is the way it is used and the economy is managed. The tories used it to bung lots of very lucrative contracts to their friends and donors during the covid crisis.

If you actually read serious analysis by economists and historians of the flag bearers for hyperinflation you will see that there were very specific sociopolitical situations in those countries, which don't apply to every money creating country.

'Printing money leads to hyperinflation' isn't a truism.

incidentally, you can knock all the euro using countries off Dinahmo's list because they are controlled by the European Central Bank and have limited ability to control their own money supply, borrowing etc. They are more like UK local authorities who have to live with the budget they're given by the central government and have limited opportunities to fund their spending by taxation.

That's why, if we were to rejoin the EU we should never join the euro and so give up our monetary sovereignty.

Over the past century of governments, the Conservatives achieved slightly higher mean growth per quarter (0.62% vs 0.56%), Labour achieved a slightly higher median (0.62% versus 0.58%)

It doesnt look much difference, but it is about a 10% difference, if I read the figures correctly. That is quite a difference.

I havent seen median used as the best guage of "average" except in a school setting.

And the link seems to disregard this quarter and that quarter, and exclude global factors.

But like any statistics, anybody, including myself, can cherry pick.

However, I do take on board, about Labour economic performance, that perception and reality can be different sometimes.

That was in reply to Casdon.

'Printing money leads to hyperinflation' isn't a truism.

That is not what I said.
I said, "It can lead to inflation, but not always. "

Totally agree with your last paragraph.

But you didnt say I said it, so maybe you didnt mean me.

fancythat

*Over the past century of governments, the Conservatives achieved slightly higher mean growth per quarter (0.62% vs 0.56%), Labour achieved a slightly higher median (0.62% versus 0.58%)*

It doesnt look much difference, but it is about a 10% difference, if I read the figures correctly. That is quite a difference.

I havent seen median used as the best guage of "average" except in a school setting.

And the link seems to disregard this quarter and that quarter, and exclude global factors.

But like any statistics, anybody, including myself, can cherry pick.

However, I do take on board, about Labour economic performance, that perception and reality can be different sometimes.

I picked out one piece at random fancythat, but there are many other comparisons using different calculation methods online, with the conclusion that there’s no evidence that overall Labour perform more poorly than the Tories economically. It’s down to our own value systems which economic management we prefer, I favour a system with a strong public service support system rather than small state myself.