| Britain’s true national debt! |
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| Written by John Pope | |||||||||||||||||||||||||||||||||||
| Wednesday, 29 June 2011 10:39 | |||||||||||||||||||||||||||||||||||
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The coalition’s economic policy to reduce the government debt as quickly as possible by reducing spending and so have to borrow less is a smokescreen for the real issue, the crippling Financial Services debt. Analysis carried out by Price Waterhouse Coopers based on the Office for National Statistics' 2010 Blue Book elegantly challenges the myth. The figures look like this:
The GDP (Gross Domestic Product) of Britain is effectively the country’s income. So what conclusions can be drawn from these figures. Firstly that, overall, the country is borrowing five and a half times the amount it earns. Equivalent to a mortgage of £190,000 when your total household income is £35,000pa. Definitely a bit on the high side but not impossible. Meanwhile the government’s share of that debt is 12%, that is its share of the ‘mortgage’ is approx £23,000. Household debt is 20% of the total. While the Financial Sector has run up 45% of the debt, equivalent to £86,000 of our theoretical mortgage. No wonder the banks are ‘too big to fail’ and so can carry on blatantly handing out huge bonuses and salaries. They have us by the short and curlys. The removal of more and more restrictions on the financial sector’s activities, starting with Margaret Thatcher’s “Big Bang”, has left Britain dangerously exposed. This coalition government is focussing on ordinary people and their jobs and services while ignoring the elephant in the room, the fact that the financial sector is out of control. References: www.guardian.co.uk/news/datablog/2010/nov/09/economicgrowth-debt-relief www.guardian.co.uk/business/2011/may/24/government-borrowing-hits-record-figure-april 
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