to tell you that £1trillion of national debit equals £35,090 for every person in employment?

[TheRealTillyMinto]

We owe £16,059 for every man, woman and child
That's more than £35,090 for every person in employment
Every household will pay £2,108 this year, just to cover the interest

This interest is taxes that dont get spent on the NHS, welfare or anything useful.

AIBU to say did you have any idea the debt this big? because i didnt. we are all in this together and we are all f**ked:

• if 2 people work in your household, your share of the debt is £70k.
• if you are a high rate tax payer, how much of the debt do you think is your fair share?

(& this isnt supposed to be a benefits thread, so if you dont want it to be about benefits, please dont make it about them. it doesnt have to be that way.....)

The trouble with all of the news headlines about debt (both personal and government) is that they ignore payment terms
its the same when they talk about pension fund deficits

please elaborate.....

Can't we get a pop star to head a "drop the debt" campaign?

It is possible to pay down large amounts of debt. Russia successfully paid back a lot of its debts before the global recession in 2007 and even with the crisis they still have very sound public finances. Admittedly they did have large revenues from oil and gas exports but it can be done.

Solution is easy - write off all debt , it's academic - the money has never existed & every country in the world is in debt.

Russias finances are "creative" - I would not trust ANY of their government borrowing figures

tilly
the total debt is not all due to be paid now - same as the total liabilities of a pension fund may not need to be paid for many years and if obesity carries on expanding, not at all

the detailed aspects of government borrowing are beyond the wit of almost all of the public, most journalists and a fair few bankers
so are almost never explained well
thank goodness for the Economist - my latest fave bedtime reading

TalkinPeace2 i know it does not need to be paid but interest does need to be paid. Now. and next year. and next year. and next year.

RedHelenB- Not every country in the world is in debt, there are net creditors most notably China but others as well.

tilly
yes, the interest is a huge number
but the REALLY important part is to reduce future borrowing so that bonds can crystallise rather than rolling over
then bit by bit it will go down - bonds are not like an overdraft, they cannot be paid off early without penalties

Can anyone explain the bank transaction levy thingy?(it does have a moniker, but i've forgot) Would it really pay the debt off?

Tobin tax

No it would not because the transactions would move offshore - unless it were made worldwide which will never happen

the vast bulk of the transactions happening in the City of London are nothing to do with British Companies so are very globally mobile

Can I be the token person who knows, and understands, little about this .

Excluding the debt to the countries who are debt free, couldn't all the countries that owed each other money do a deal? So, if we owe the USA £1 billion and they owed us the same couldn't it just be cancelled out? Then both countries save the relative interest. I know we can't but why?

Also, I know how much we owe but how much are we owed? What happens if we don't pay?

Excuse me. They are genuine questions but I'm on the train with idle hands and mind.

Hully Norway sounds good. Shall we form an advance party to check it out and pick plots? Would they mind us all just turning up like that?

Why would it not go global Talkin? Would it mean investors, Companies, Banks would lose so much, that it wouldn't be worth the effort(IYKWIM)?

And thank you for the answer.

Tufty i've thought that as well. I wonder what would happen. Just start again, Year Zero (so as to speak).

Norway does sound good.

It is the level of debt not the actual fact that we have debt. All countries do its how the whole system operates. But as a percentage of GDP it is way too high and the harsh cuts they are making to try and reduce it appear to be having no impact so far although tbf lots of the cuts will bite this year. But targetting the low paid and those on benefits is wrong.

Pathan
For the same reason that there are "offshore" finance centres
somebody will always break ranks to gain a competitive advantage
with electronic trading, the trades can be done from anywhere in the world and all you need is one teeny island to asay "tobin tax free" and the traders will pile in and break the system
and the evidence of the laxity of clampdowns on things like anonymous limited companies is that the HUGE amounts of illegal money would topple the system

TalkinPeace2 i know how to price a bond (& various other products) but you dont have to pay off the bond to unwind the deal.

plus i think many bond holders would be glad of the opprtunity to reduce their indirect eurozone exposure in the UK.

What happens if we don't pay? well you know when the banks had trouble last time & we paid them lots of money, more of that....

Blimey, Talkin, the Financiers really are Masters of the Universe. I'm so ignorant, but feel terrified. I heard a radio interview with an Economist who said war in Europe is a real possibility, if the Euro isn't sorted.

It scares the life out of me, the implications of this mess that i don't even understand.

Tilly
fair point about Euro exposure
but where would they invest instead? (serious question)
and yes, the bonds get bought and sold but they run to the end like PWLB loans

Pathan
read more of the Economist and less of the normal papers !!

Yes indeed. .

tufty

Unfortunately it's not that simple. All the debt and loans have different terms and conditions and interest levels. Therefore it's not as simple as saying we owe USA a billion and they owe us a billion lets cancel them out.

What are the details of the loans and what are the risks attached to that particular loan. These reasons and more make one billion and another billion unequal.

phew thank god labour got kicked out

think what the total amount owed would be if they were still in, throwing money around willy nilly

tufty

An example would be if you had a £50K mortgage would you think that it is equal in cash terms to anyone elses £50k mortgage? Some people get better rates, have less risk due to other assets etc. So the £50K loans are not equitable.

Norway! see up thread. it is the only country left.

have only just given this consideration & it is really obvious: you buy back the bond from the bondholder.

this one is for me
and this one is on your behalf

anybody want to buy any UK debt?

www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary.html?fourWayKey=GB00B46CGH68GBGBPUKGT

just write a cheque to me & i promise i will invest it on your behalf and definitely not get the last boat to Norway

Skål!