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How long would it take to pay off the national debt?

If the next government can start running a consistent surplass of say 3%, how many years would it take before UK plc was debt free?

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Well it is very complex. The government has debt even when it has a surplus. It depends when the debt comes up for renewal, how long the bonds are, money printing, balance of trade payments. The government still has debt that goes back to before WW1. The deficit is more important than the debt. Also national debt shouldn't be compared to GNP or GDP, but rather national net wealth. Basically I am saying the debt will never be paid off, and it shouldn't be paid off.
(edited 9 years ago)
Reply 2
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Quady
20
Original post by william walker
Well it is very complex. The government has debt even when it has a surplus. It depends when the debt comes up for renewal, how long the bonds are, money printing, balance of trade payments. The government still has debt that goes back to before WW1. The deficit is more important than the debt. Also national debt shouldn't be compared to GNP or GDP, but rather national net wealth. Basically I am saying the debt will never be paid off, and it shouldn't be paid off.


The perpetual WW1 bonds are being paid off:
http://www.theguardian.com/money/2014/dec/03/treasury-repay-war-debts-bonds-uk

To the OP, with a balanced budget it'd be paid off in 50 years. With a 3% surplus, 10-15 years perhaps.

Depends what happens to the BoE held gilts quite a lot.
Reply 3
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fodder
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Original post by Thomas2
If the next government can start running a consistent surplass of say 3%, how many years would it take before UK plc was debt free?


Um... I don't think the idea was to treat it as money or debt in the same way that you or I do.

With Fiat currency you can print your way out of debt.


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Original post by Quady
The perpetual WW1 bonds are being paid off:
http://www.theguardian.com/money/2014/dec/03/treasury-repay-war-debts-bonds-uk

To the OP, with a balanced budget it'd be paid off in 50 years. With a 3% surplus, 10-15 years perhaps.

Depends what happens to the BoE held gilts quite a lot.


I said debt, not bonds.
Reply 5
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Quady
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Original post by william walker
I said debt, not bonds.


What's the difference?
Reply 6
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fodder
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Original post by william walker
I said debt, not bonds.


Most government debt is structured through T-Bonds.


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Reply 7
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Quady
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Original post by fodder
Most government debt is structured through T-Bonds.


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Not gilts?
Original post by Quady
What's the difference?


Bonds are structured loans, debt includes money the government has lost including depreciation and capital spending. The government still has interest which it bought centuries ago and capital spending from before the war, which it spend revenue on. As I said the debt is very complex.
Original post by fodder
Most government debt is structured through T-Bonds.


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Yes.
Original post by Thomas2
If the next government can start running a consistent surplass of say 3%, how many years would it take before UK plc was debt free?


What Quady says provided that the economy can average growth of 2-3% over the same period.
never
Reply 12
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Quady
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Original post by AnorexicOnWkends
never


Great maths.
Original post by Quady
Great maths.

got an a in as maths so thanks
Original post by AnorexicOnWkends
got an a in as maths so thanks


I would like to challenge that of you think that the sum of the surpluses described in OP would never reach a trivial sum of money

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Reply 15
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fodder
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Original post by Quady
Not gilts?


Treasury bonds / gilts - different names for the same thing: a technical way of describing them is futures contracts paid up for delivery sold on a government's own fiat currency by a government.

My name is John and I promise to pay you 3,000000000 John Dollars in 30 years. I can just use my laser printer and reel off a piece of paper to give you. Means nothing as its a fiction.




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Reply 16
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Quady
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Original post by fodder
Means nothing as its a fiction.


As is any other medium of exchange. Especially gold.
Reply 17
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sdotd
17
the debt will never be paid off and no government intends to do so.
Reply 18
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Quady
20
Original post by sdotd
the debt will never be paid off and no government intends to do so.


Interesting stuff.

Doesn't answer the question though does it...?
Original post by sdotd
the debt will never be paid off and no government intends to do so.


And yet you criticise politicians for trying to do it, and support other politicians for trying to increase it

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