Reality check over Government spending and cuts

Our national debt: £4,800,000,000,000 (4.8 TRILLION)
Our deficit (This isnt our debt its how much debt we get into every year): Around £150,000,000,000 (150 BILLION)

So every single year we get into debt by 150 Billion more.

People blame our debt on the banks. This is wrong. It cost us 80 Billion to bail out the banks and in a few years we will get all the money back and possibly have a profit.

Our national debt comes from years of over spending NOT bailing out the banks.

People to need to realise that these cuts only tries to BALANCE THE BOOKS, aka not over spend by 150+ Billions a year. We will still have 4.8 Trillion debt, its only a matter of time the entire system and society will collapse if these debts arnt dealt with

Scroll to see replies

Reply 1

Aj12

I am wondering about this profit. As I believe (could be wrong) none of the shares have gone above the price we paid for them?

Lets home the government can cut down on this deficit. Can't believe at the general election we were on the watch list for our credit rating.

Reply 2

creak

Your figures are complete nonsense.

Reply 3

username547863

Original post by creak

Your figures are complete nonsense.

National debt is at 1 Trillion and deficit is around 160 Billion according to ONS.

http://www.statistics.gov.uk/CCI/nugget.asp?ID=277
http://www.ukpublicspending.co.uk/uk_national_debt_chart.html

So not completely nonsense

Reply 4

HistoryRepeating

Original post by creak

Your figures are complete nonsense.

*citation needed.

Generally people against cuts are actually against "cuts that affect ME". Very rarely is their argument backed by anything other than the most cursory of economic justification.

Reply 5

Hantheman

Original post by NGC773

Well, if the debt's 1/4 what he's saying tha'ts quite a bit.

Reply 6

Llamageddon

Original post by Hantheman

Well, if the debt's 1/4 what he's saying tha'ts quite a bit.

1/4 is about right. In his figures he has included all liabilities, many of which we won't have to pay out.

The figure includes pensions and bank securities.

Reply 7

HistoryRepeating

National debt figures should include PPP commitments, its ridiculous that they dont as in practice we WILL have to pay them, just like interest on debt.

Reply 8

creak

Original post by HistoryRepeating

*citation needed.

Generally people against cuts are actually against "cuts that affect ME". Very rarely is their argument backed by anything other than the most cursory of economic justification.

His figures were nonsense, and his reading of the situation is utterly wrong. The deficit figure was the only one that was close.

I’m not going to pretend I can speak for everyone, but I know there’s more to the anti-cuts position than simple self interest.

Reply 9

HistoryRepeating

Original post by creak

You are right, there is ideological hatred of tories and people with money as well.

Reply 10

username547863

Original post by Hantheman

Well, if the debt's 1/4 what he's saying tha'ts quite a bit.

Other figures thrown around is 4.8 Trillion because it includes liabilities from pension funds and risk from the banks.

http://www.iea.org.uk/in-the-media/press-release/uks-true-national-debt-%C2%A348-trillion

http://www.telegraph.co.uk/finance/economics/7957110/Government-urged-to-reveal-true-national-debt-of-4.8trillion.html

Reply 11

Hantheman

Original post by NGC773

Ah thanks.

Reply 12

Nightstar-27

You do realise in terms of GDP we are currently the 23rd highest. Countries with higher debts than ours and higher GDP (meaning they owe more money) include Germany, France and Japan (even before the earthquake). Meaning there are countries with far worse debts than ours, yet not all these countries are taking cuts as deep as we are. The US total debt is 97% of their GDP and I haven't heard anything about cuts to their public sector like ours. Plus our debt has been way worse than it is now in the past, especially after World War 2 and look we survived. People are getting too worked up over this debt. Our total debt is 76% of our GDP and if that was just our public sector net debt is £875.8 billion or 58% of National GDP (as of 27th of March 2011).

Source:
http://www.economicshelp.org/blog/economics/uk-economy/uk-national-debt/
http://www.economicshelp.org/blog/economics/list-of-national-debt-by-country/

Reply 13

Aj12

Original post by creak

That may be but until they can explain their alternative they have no creditability.

Yelling tax the bankers and close tax loopholes is hardly an economic plan.

Reply 14

creak

Original post by HistoryRepeating

You are right, there is ideological hatred of tories and people with money as well.

Also the basic understanding that there are other methods of reducing the deficit beyond harsh cuts that’ll hit the poorest and most vulnerable in society the hardest, whilst letting the better off (many of whom caused the current crisis) get away scot-free. There are three ways to reduce the deficit; economic growth, tax reform, and cuts. This government is only focusing on the last.

Original post by Aj12

That may be but until they can explain their alternative they have no creditability.

Yelling tax the bankers and close tax loopholes is hardly an economic plan.

PCS and Compass have fully costed alternatives, Richard Murphy has a manifesto for Tax Justice. I’ve no doubt there are others by various NGOs, Think Tanks, Unions and so on- you're just not looking for them. Unfortunately they're not going to be publicised by the usual news outlets, for obvious reasons.

Reply 15

darknessbehold

Oh don't worry, the Rothschild Family will help us out :rolleyes:

Reply 16

creak

Original post by Nightstar-27

All true, the situation in the UK isn't nearly as bad as the right would like the public to believe. Another site which lays it out very clearly is this one:

http://falseeconomy.org.uk/cure

The financial crash and the resulting debt and deficit is being used as cover for the accelerated imposition of a neoliberal economic agenda. To see people actively cheering it on is sickening.

Reply 17

username547863

Why do so many people still want the government to overspend every year? Even at the end of this parliament we will STILL be spending more than we have.

I think its ridiculous people supporting government overspending each year. We should only spend what we have. Its been proven that government spending reduces growth and costs jobs.

Reply 18

HistoryRepeating

Original post by creak

Please explain and justify this:
"many of whom caused the current crisis"

Furthermore, a full third of the defecit reduction is being achieved by tax "reform". Significantly increasing taxes on enterprise (which is basically what you are calling for) has a very, very well documented and understood negative effect on economic growth.

I've seen Richard Murphy's manifesto though not the PCS/Compass proposals. The manifesto is a joke - it advocates tax changes that would basically eviscerate the UK financial services industry (which, need I remind you, provides a fifth of the countries GDP and pays a significantly larger proportion of tax), and permenantly chase multi-national big business out of the UK.

What that, you, and many others completely fail to understand is that taxing corporations is an incredibly difficult balancing act - you obviously want to tax as much as you can, but have to also note the ease with which they can move their operations abroad AND the effect significantly burdening businesses with additional taxation will have on economic growth.

Low headline rates on corporation tax have been shown time and time again to have hugely beneficial effects on growth, which in turn leads to greater tax receipts. What a lot of the more far-left commentators completely fail to get to grips with is that increasing tax on business often has the opposite of the intended effect in the long term - lower tax receipts.

A few pages of polemic statements (with footnotes almost all leading to TUC press releases and the author's own website) with no application of economics (which is the only important consideration in these cases) are pretty useless quite frankly.

Reply 19

creak

Original post by HistoryRepeating

Please explain and justify this:
"many of whom caused the current crisis"

Those in the financial services, property speculators, a complicit state etc. It wasn’t exactly the lowest quartile who were responsible for the kinds of behaviour that caused the crash.

Original post by HistoryRepeating

Paragraphs concerning 'tax on enterprise'

I can see you were just itching for a chance to get that particular bugbear out of your system. Trouble is, I never mentioned anything about increasing corporation tax, though now you have I’ll note that it was second lowest in the G20 even before the recent budget, so if anything it could still have gone up a little.

But all of this actually misses the bigger issue- tax evasion, tax avoidance, and simple uncollected tax. Legislation needs to be brought in or changed to close the loopholes, and what laws exist need to be enforced far more rigorously than they currently are- obviously, closing the tax gap would relieve the pressure on government departments to cut so hard. And yet, the Tories are slashing the HMRC budget and firing huge numbers of (revenue generating) staff; they’re ignoring the mechanisms by which the richest companies and individuals hide huge amounts of wealth offshore; civil servants are writing off the tax bills of the largest corporations. It’s utter madness, and it shows that there are other agendas at work beyond simple ‘deficit reduction’.

Original post by HistoryRepeating

A few pages of polemic statements (with footnotes almost all leading to TUC press releases and the author's own website) with no application of economics (which is the only important consideration in these cases) are pretty useless quite frankly.

ONS and IFS figures which put paid to the hyperbole surrounding the size and nature of UK debt, which is what the post linking to that page was all about. It does that job very well. The situation really is not as dire as it’s constantly made out to be.