Do You Think That The Government Will Ever Clear The National Debt? Fat Chance!

It makes my head hurt too, Lillie, and I'm not ashamed to admit that I don't really understand it, despite taking a keen interest in politics, current affairs, and business.

At the risk of sounding naive, verging on thick, I would ask the question, 'Where has all the money actually gone?' I suspect a lot of it never existed in the first place, but was loaned to people on the spurious basis that their houses would soon be worth that gazillion that you mentioned.

There are two different levels of debt in this country public borrowing, which is that done by the government to implement their policies and plans. That is currently at £1 trillion and private debt, that which has been leant to a range of businesses and people for mortgages credit cards, loand etc.. that currently stands at about £4 trillion.

No your not thick Feline just baffled like me when these vast sums of money are mentioned. We can't fathom that amount because we don't come across it in our daily lives.
These are 'deep money' subjects which Parchester has kindly stepped in and explained the levels of debt to us but I can't understand how it's got this bad and where it's all gone.
Perhaps we should do what the Americans did and create some out of thin air or am I naive as well?

Sadly, Lillie, we've done that already. It's called quantitative easing or, in our language, printing money!

I might be a bit of a thicko when it comes to these matters, but I do know that leads to inflation. When the Germans did it, they needed a wheelbarrow to transport enough money to buy a loaf of bread.

And yes, thank goodness for Parchy and the others who can explain these things.

Yes that's the term 'quantative easing' Feline, thanks, it was hidden in the dark recesses of what was once my brain. Well it never caught on did it or we would all have access to a printing press.

LOL, Lillie, thanks for that! You might just have the germ of an idea there.....

Believe me I'm no expert and am happy to join the 'thicko bandwagon'.

All I know is what I read and listen to and attempt in my own way to understand and grasp these figures but given the enormity of them, they are unfathomable.

So much information is being put out by so many different vested interests and much of it appears to be contradictory depending on whom you chose to believe.

One thing for certain is that the global economy, of which we are a part, has been in deep do dah since 2008 abd despite assurances that we had emerged from the worst of times, this is far from the truth.

The other thing to believe is that so called financial experts cannot predict what will happen until it is happening and then, sadly, it is all too late!!

It is easy to talk the economy up but in real terms if people aren't feeling those benefits then these statements become counter-productive and further fuel the uncertainty.

Thank you again Parchester. You are by no means a thicko,in fact I hang on your every word re all things fiscal as I'm the naive one in such matters.
But like you say some things are beyond comprehension in such a minefield as this, so I tend to lose lock with certain issues.

Thanks, Parchy. You always manage to make helpful and intelligent coments without being patronising.

The problem is that the government has set its sights far too low - it will never stop the national debt rising if it only aims to cut a quarter of the annual deficit.

Erm, I think you have some faulty logic there!

If the higher unemployment is due to a reduced public sector, then that's a cost saving. Remember that every penny a public sector worker takes home after tax is a penny that a private sector worker has contributed in tax.

The only way out of the slump is for the private sector to grow thereby reducing unemployment (and thus benefit payouts) while increasing tax revenues to the government.

I see your long term logic but unless the economy begins to grow now, then this governments masterplan of private enterprise employing people is bound to fail.

The economy isn't at a place where the private sector has the confidence or financial means to grow and thus employ people. In fact with so little confidence we are seeing many businesses going to the wall. If there is any faulty logic going on here it is that of this government's.

The two differing levels of debt are greatly affecting individual and therefore national confidence. Yes, public borrowing is at £1 trillion, whilst private borrowing is more in the region of £4 trillion. Combined, these figures mean that if we are to ever recover from the mess we are in, then spending our way out of this, as the government had hoped, and the exchequer getting the increased tax revenues from that spending isn't necessarily going to work.

I suppose so much is about perception and with negative GDP figures being released yesterday, then will anyone be brave enough to create new and meaningful employment opportunities in the current climate?

Even the government is now having to admit that we will not be rid of this national debt by the time of the next election.

With that admission, I worry about how much of this country will be decimated in the process of striving to reduce that national debt!

How do you propose growing the economy?

We can't increase public sector employment without increasing the debt. Every penny such an employee took home would have to be borrowed if the private sector tax revenue did not supply it. Any of this borrowed money that was then spent in the private sector would still be borrowed money and would effectively therefore be another taxpayer underwritten bail out, this time of the retail and service sector.

Personally, the only way I can see of doing this is to offer massive tax advantages to private enterprise to hire new staff - say, foregoing employer NI on new employees or even subsidising new employee subsidies by paying the employing companies the jobseeker's allowance the govt would otherwise be paying the person who just got hired. This would result in a cost neutral scenario (to the government) while increasing personal tax revenue (from the new employee) and corporate tax revenue (assuming profits would be boosted by having more employees).

You appear to be answering your own question and also appear to be attributing the theoretical need to increase public sector jobs to me, which I have not stated.

Since 2008 unemployment has been rising in this country, because the private sector/enterprise, the banking and retail sectors have all lost jobs, which have contributed to the overall figures of increasing unemployment, which has resulted in less tax revenue streams and higher welfare payments.

The public sector job losses have yet to be fully factored into this figure. So I suspect the figure will get higher.

It is this government who has stated that the loss of public sector jobs will be offset by the private sector and this hasn't come to fruition and nor will it with the economy in such a perilous state and the banking sector setting criteria for loans that many have said is not achievable.

Perhaps, as you say, the government may have to artificially create an approach that kick starts the growth within the private sector.

In order to actually start reducing the debt which Blair & Brown stoked up with mad overspending policies, the current government would need to actually have radical policies like re-examining the Welfare State and National Health Service, both of which consume vastly more resources than was ever envisaged 60-plus years ago.

A while back, I took part in a survey inviting respondents to make choices on how to reduce the deficit - the target was the whole £158,000,000,000 per annum (rather than this government's pansy £40,000,000,000 by 2015) and I was able to identify £123,000,000,000 per annum of savings just from the options given to the survey respondents. With a little fettling of those options (eg I would have cut both alternatives in some cases), that deficit could have been wiped out - and it only requires fresh thinking.

If I could reach that solution, then it surely couldn't have been difficult, as otherwise I'd be a Whitehall mandarin (and they wouldn't have me when I tried to get in 20 years ago...).

Even tonight the Chief Financial Officer of the IMF has broken ranks with the head of the IMF and believes that Britain should be cutting slower, which may allow for some growth to develop.

You ask us if we 'know better, and can do better'? There is little point in speaking our minds when you have a government who has selective hearing. They hear loudly what others say that agrees with their position and act deaf to the chorus of those who have offered alternatives.

You have a government who has no other alternative but to continue with policies that are failing to kick start the economy, who appear unable to convince the banks to lend to small businesses, the same privately run businesses that this government has maintained will take up the slack of job losses in the public sector and create growth, and whose policies could well take us into another recession, then I would hope that our elected 'masters' would have an alternative.

The economy has flatlined, if this were a medical drama and after attempts to kick start the heart, it continued to flatline, it would be pronounced dead.

The economy is not dead but continued attempts to do nothing but blindly continue doing what they are doing, whilst seeing the evidence that this is having no impact, then it is necessary to do something different but what if they have no plan 'b'?!!

Didn't you realise - the Falklands are the guaranteed "win an election" tool. It worked for Thatcher, after all.

Just ramp up the rhetoric and wait for some innocent action like a salvage crew landing on South Georgia and raising a flag to let passing ships know that there were humans on the island (it just happened to be an Argie flag because the crew were based in Buenos Aires, although they were British)....

Galtieri was spoiling for a fight in 1982 to prop up his junta and Cristina Fernandes de Kirchner is riding a populist wave right now, so look out for more lives being wasted soon.