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It's terrible to be in debt, we must get out of it a.s.a.p. Watch

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    "It's terrible to be in debt, we must get out of it a.s.a.p." The country cannot afford to be in lots of debt. We must make massive cuts as it is such a terrible thing to be in so much debt.

    Yet it's fine for around 47% of the population (students at university) to be in FAR MORE debt for a lot of their working lives just to pay for their education. Never mind mortgages and living costs etc..

    Anyone else annoyed by the hypocrisy?
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    We could have had it all ...
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    (Original post by my_username_was_taken)
    "It's terrible to be in debt, we must get out of it a.s.a.p." The country cannot afford to be in lots of debt. We must make massive cuts as it is such a terrible thing to be in so much debt.

    Yet it's fine for around 47% of the population (students at university) to be in FAR MORE debt for a lot of their working lives just to pay for their education. Never mind mortgages and living costs etc..

    Anyone else annoyed by the hypocrisy?
    Maybe being in that debt will motivate you to get a good job and be more productive to earn more and pay it off.

    I hate people who expect other people should be paying for their degrees! Comparing the trillions of debt a country has to student debt is stupid
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    No one is concerned that we are in debt. Every country is in debt because that is one way to raise money. As long as the returns on investments made with borrowed money outstrip interest payments on said borrowed money, it is better to remain in debt. This is the situation of every country and every company - no one is completely debt free because it makes no business sense to be so.

    In an analogous situation, students are in debt because they borrow money for an investment in their education. In most cases, the return from that investment outstrips the cost of borrowing the original investment money.

    The concern is that the deficit is huge. i.e. the difference between how much revenue the government gets and how much the government spends is huge. This is unsustainable. This is analogous to a student who is in a lot of debt but who does not get a well-paid graduate job. In this case the return on the investment would not outstrip the cost of borrowing (paying interest), and the student would sink into more and more debt until he lost everything. Fortunately in this case, the student does is not actually made to pay interest or repayments and will eventually have his debt wiped out by the government.
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    Lets do what Ceausescu did about Romanian debt

    ruin the country to save it
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    (Original post by my_username_was_taken)
    "It's terrible to be in debt, we must get out of it a.s.a.p." The country cannot afford to be in lots of debt. We must make massive cuts as it is such a terrible thing to be in so much debt.

    Yet it's fine for around 47% of the population (students at university) to be in FAR MORE debt for a lot of their working lives just to pay for their education. Never mind mortgages and living costs etc..

    Anyone else annoyed by the hypocrisy?
    Fail. Government debt is not to bad. A deficit is. But even then its not awful and can be debt with.
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    (Original post by Aj12)
    A deficit is.
    But Britain has run a deficit for the last 30 or 40 years (with a couple of years as exceptions).
    A deficit is not by its nature bad. Obviously, having a big one is bad. But I do think the Tories have done a very good job in slightly misleading people.
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    (Original post by my_username_was_taken)
    "It's terrible to be in debt, we must get out of it a.s.a.p." The country cannot afford to be in lots of debt. We must make massive cuts as it is such a terrible thing to be in so much debt.

    Yet it's fine for around 47% of the population (students at university) to be in FAR MORE debt for a lot of their working lives just to pay for their education. Never mind mortgages and living costs etc..

    Anyone else annoyed by the hypocrisy?
    students run up debt to study thereby increasing income for decades to come

    so tell me does the government running up debts do this
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    People have been lied to, paying off the defecit will not take us out of debt. A defecit is the shortfall between spending and income. The only way to reduce the defecit is by higher taxation or cutting spending.
    To pay off debt, we need to grow, the economy needs to be propped up by investment. Labor spent too much, but the Libs were calling for more spending. We are actually lucky we didn't slip into a depression.
    The government has to find a balance between getting the books out of the red, while leaving the country in a good enough state to pick itself back up after annihilating public services, unemployment is high and no-one's spending.
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    (Original post by shutter)
    We could have had it all ...
    Adele <3
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    (Original post by WelshBluebird)
    But Britain has run a deficit for the last 30 or 40 years (with a couple of years as exceptions).
    A deficit is not by its nature bad. Obviously, having a big one is bad. But I do think the Tories have done a very good job in slightly misleading people.
    Why slightly?

    I thought we were running a deficit of 11% of our GDP a year, or £165 billion?

    EDIT: Our debt is also just over £1 trillion, or about 71% of our GDP

    From the ONS.
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    (Original post by NGC773)
    Maybe being in that debt will motivate you to get a good job and be more productive to earn more and pay it off.

    I hate people who expect other people should be paying for their degrees! Comparing the trillions of debt a country has to student debt is stupid
    Don't be silly ignoring businessmen; those who actually go on to get highly paid jobs which in turn mean that they pay back a lot of tax are graduates. In my opinion the ex-polytechs should be turned back into polytechniques with funding from the private sector who can dictate what is taugth based on what is needed in their sector and the prices of the rest of universties should come down or be eliminated; that way we allow those who are clever enough to be intellectuals to do so; whilst still having a workforce with the skills relevant to their jobs.
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    (Original post by wibletg)
    Why slightly?

    I thought we were running a deficit of 11% of our GDP a year, or £165 billion?

    EDIT: Our debt is also just over £1 trillion, or about 71% of our GDP

    From the ONS.
    What I meant is that the tories seem to be promoting the lie that a deficit is bad.
    It isn't, as long as it isn't too big, and as long as you have enough economic growth.

    (Original post by ikoghoo)
    To pay off debt, we need to grow.
    Very good point actually.
    Reducing the deficit is fine. But until we actually grow enough to be able to pay off the debt, then we will still be paying the same ludicrous amounts on just the debt interest.
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    (Original post by WelshBluebird)
    What I meant is that the tories seem to be promoting the lie that a deficit is bad.
    It isn't, as long as it isn't too big, and as long as you have enough economic growth.
    Oh yeah, a deficit isn't bad, but too big a deficit like the one we've had for a couple of years is bad
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    (Original post by ikoghoo)
    People have been lied to, paying off the defecit will not take us out of debt. A defecit is the shortfall between spending and income. The only way to reduce the defecit is by higher taxation or cutting spending.
    To pay off debt, we need to grow, the economy needs to be propped up by investment. Labor spent too much, but the Libs were calling for more spending. We are actually lucky we didn't slip into a depression.
    The government has to find a balance between getting the books out of the red, while leaving the country in a good enough state to pick itself back up after annihilating public services, unemployment is high and no-one's spending.
    but it will slow its growth- if we followed labour's plan we would have c. 5.5% of GDP deficit, c. 110% of GDP debt and in interest repayments larger than our defence budget which is the fouth biggest in the World and this is only 2015 if Investors panic (and they would even Greece's financial situation was in a better state than this when it had to be rescued by the IMF and Euro zone) then we would see interest rates rocket and confidence evaporate
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    (Original post by WelshBluebird)
    What I meant is that the tories seem to be promoting the lie that a deficit is bad.
    It isn't, as long as it isn't too big, and as long as you have enough economic growth.



    Very good point actually.
    Reducing the deficit is fine. But until we actually grow enough to be able to pay off the debt, then we will still be paying the same ludicrous amounts on just the debt interest.
    the tories were saying OUR deficit is bad and it is awful

    economic growth is likely to be positive- the OBR, IMF and OECD all agree
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    (Original post by -2D-)
    the tories were saying OUR deficit is bad and it is awful

    economic growth is likely to be positive- the OBR, IMF and OECD all agree
    The fact they are aiming to eradicate the deficit in such a short amount of time suggest that they are saying that any deficit is wrong.

    As for economic growth - the figures that have been in the news disagree. And I don't see how making hundreds of thousands of people unemployed is going to help it. Of course, I am not an economist though.
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    (Original post by WelshBluebird)
    The fact they are aiming to eradicate the deficit in such a short amount of time suggest that they are saying that any deficit is wrong.

    As for economic growth - the figures that have been in the news disagree. And I don't see how making hundreds of thousands of people unemployed is going to help it. Of course, I am not an economist though.
    in the last quarter of 2010 it fell afterwards it is expected to increase again

    the aim is to eradicate the deficit to stop the debt increasing

    making cuts could allow economic growth to happen as reducing public spending could increase private spending as in the end how do you fund a deficit?- by borrowing from the private sector, if the public sector stopped individuals/firms won't hide their cash under the pillow they'll either spend it (unlikely), invest (mainly firms) or save it (most likely). GDP= Consumer Expenditure + Investment + Government Spending +Exports - Imports. So the first 2 will clearly lead to no change in GDP as money is just spent by someone else. If money is saved then banks have it some will be kept to increase buffers against another credit crunch but not most as they have to pay interest and some banks have plenty of buffers the result will then be lent out driving the economy. this is called crowding out.

    also cutting the deficit impacts interest rates. if the government embarks on a credible deficit reduction plan (IMF, OECD, Moody, Standard and Poor and Fitch all say its credible) then investors will be less worried about sovreign debt and will require lower rates on government bonds. as a result lenders will probably lower rates to borrowers as they tend to shadow (amongst other things including the Bank of Englands base rate) sovreign debt rates hence borrowing will increase (connected to last point about banks having more money to lend as savings are higher) hence the economy will grow.

    furthermore the weak pound and buoyant global economy should also help drive exports
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    We're not even in serious debt. Our national debt is at manageable levels.

    Besides, public and private debt are different. High student debt is bad since it can discourage students and people entering higher education. This has a knock-on effect in terms of productivity levels, and then potentially lower economic growth. No debt is intrinsically bad though.

    I think there should be a student/graduate tax, and higher education should be free at delivery. Graduates should just pay a higher rate of income tax once they've finished uni.
 
 
 
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