The Uk Government balancing it's financial books.

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.

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.

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.

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.

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

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

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.

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.

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.

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

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

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.

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...

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.

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.’.

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.

The other side of GSM’s argument is that people buying private sector services or goods are paying towards profits that are not reinvested in the business but go into the pockets of shareholders. And that these services or goods are often priced out of reach of too many people who work long hours at low paid jobs.
I don’t call the argument right-wing, just I’m all right Jack.

I trust those who criticise the public sector in terms of waste include HM Governent and HM himself in those criticisms.

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.

MaizieD

Sorry, forgot to post the link.

www.economicshelp.org/blog/2215/readers-questions/uk-debt-held-by-oversees-investor

And don't forget, a significant part of the 'debt' is owed by the government to itself.

Thanks for this.I am wading through. And pressing further links on it.

The danger associated with borrowing (even with quantitative easing using bonds sold to the Bank of England) is that at some point lenders (especially but not exclusively foreign lenders) begin to worry about whether the UK is able to maintain debt interest payments and eventual repayment of capital.

That is Gold Standard thinking, Grantanow, it's been out of date for the past 50 years. The government, as the sole issuer of its money, which is no longer backed by gold or silver holdings. It cannot 'run out of money'. That's why people like investing in government bonds, they know they will always get their interest and repayment of their principle if they sell their bonds back to the government.

Government bonds have always been the safest investment available.

Tuition fees were only put the rate they were because of privatisation and lack of investment from the UK government though?

I don't have an issue with the old system of universities and polytechnics though as it seemed to give better access to education for 'most' people?

Sorry, forgot to post the link.

www.economicshelp.org/blog/2215/readers-questions/uk-debt-held-by-oversees-investor

And don't forget, a significant part of the 'debt' is owed by the government to itself.

I also see investment in higher education as of value, jobs are going to change so much with the introduction of A I that we need people who are able to think, and a good university education should teach that.

MaizieD - there used to be a lovely pie chart thing which showed who the government owed money to. Including to other countries. But I can no longer find it. I think goo gle must have removed it but I am only guessing. As far as I can remember, owing money to Uk people and institutions was a fraction of who we owe money to. But I could be wrong on that.

According to this website (which agrees with others) foreign investment in government bonds is about 30%. This could be investment for income, but could also be for speculation. There is a secondary market for bonds (i.e not bought direct from the Treasury, but bought from other bondholders (just like the market in company shares) which is probably driven more by speculation than by investing for income.

Government bonds are not the only source of government 'debt', though. Nationals Savings accounts and Premium Bonds are also part of the 'debt'. So foreign holding of government 'debt' over all is probably less than 30% of the total.

Increased efficiency is not always of benefit to the consumer though, with trains, driver only trains are not an improvement to the safety or satisfaction of the traveller, and that is the efficiency they want to introduce.

Invest in housing.

Until a person has a home he cannot find a job, sustain a relationship, contribute to his community.