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Old 16 November 2008, 01:53   #11
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So the 22M people who are paying tax need to cover national borrowing to the tune of 35B/year with their taxes, just to cover the INTEREST ALONE?



Or have I got that wrong?
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Old 16 November 2008, 09:09   #12
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Originally Posted by malthouse View Post
So the 22M people who are paying tax need to cover national borrowing to the tune of 35B/year with their taxes, just to cover the INTEREST ALONE?



Or have I got that wrong?
sort of,

to be fair though the 5.5M of population who work in the public sector are of course also taxed. Together though we all have to pay their saleries as well as all of the other expenses plus the intrest on the debt and so on.

Is it any wonder the government keeps inventing new penalties and fining systems to generate cash
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Old 16 November 2008, 15:08   #13
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Originally Posted by Doug Stormforce View Post
Is it any wonder the government keeps inventing new penalties and fining systems to generate cash
And the last classic was the change to self assesment in 1998, whare all self employed who enjoyed paying tax a good time after they had made their years profit,...... in other words , they knew what their liability would be, now we have to guess and pay it up front.. boy that hit me hard that year
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Old 18 November 2008, 14:15   #14
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On the subject of debt, statistics, spending, there's an excellent article on the BBC news page:

http://news.bbc.co.uk/1/hi/magazine/7733794.stm

I remember that the national debt was the biggest ever at the end of the last Conservative government (and the annual interest payments were more than the total education budget, to use a comparison like Doug's), but I had no idea how it compares with the current debt. Excellent BBC piece shows that you can spin things how you like. Would be nice to hear a bit more reasoned and clear reporting like this.

Gerry
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Old 19 November 2008, 05:37   #15
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Interesting link to the BBC article and at a first glance it seems to make a lot of sense.

It suggests that stating that “National Debt has increased” and by measuring National Debt in Pounds Stirling is “rubbish” because inflation would increase National Debt anyway.

So let’s apply the Principle and see what we get;

At the end of 2001 National Debt was at 315B (source NSO)
If we use Gordon’s sums the national Debt end of August 2008 before buying out the bank was 637.4B

This means the debt has more than doubled in six and a half years, but we forgot to allow for inflation.

If we assume a 3% rate of inflation per year for those six and a half years (inflation has been below that amount several times but has risen sharply this year) we will find that the 315B at end 2001 should have become 383.6B- just based on inflation.

So if we adapt the inflation model sarcastically suggested in the BBC article I think it’s fair to say the National Debt is still out of control

2001 Actual Debt 315B
Aug 2008 allowing for inflation 383.6B
Aug 2008 Actual Debt 637.4

The BBC article then goes on to say
Quote:
So how do we work out if the numbers are genuinely better or worse than in the past, and by how much?
First, we compare them with the size of the economy in pounds (or what's called "money GDP"). This takes account of the combination of inflation and how well off we are, and is the method used by statistical authorities worldwide.
So let’s try using this method suggested in the BBC article

Nearer the beginning of this decade, the Government could boast about the national debt being reduced to just 29% of GDP. This was partly aided by the windfall of mobile phone licenses. National Debt is now forecast to rise to 44% of GDP by 08/09. This is half as much again as it was

Again my conclusion is that Labour borrowing is out of control. It was after all Gordon Brown who introduced the “golden rule” that National Debt was never to exceed 40%

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Originally Posted by Gerry View Post
Excellent BBC piece shows that you can spin things how you like. Would be nice to hear a bit more reasoned and clear reporting like this.
I have applied both sorts of spin suggested in the “excellent” BBC article and I still find our Governments borrowing to be out of control.

And this is being pretty conservative (as in generous, not the party). The true scale of the problem is actually much bigger.

Public Sector Pensions are a liability that the government has to pay from current spending but have not been included in the National Debt figures.
The Government does not include private finance initiatives in its debt figure even although it has committed itself to this liability

The government has given 100B worth of guarantees to Northern Rock, hopefully they will not loose money here, but like any investment things can go up and down. This is a balance sheet liability, and will remain so until we see a return.

The UKs demographics will only worsen the problem. In about 8 year the baby boomer population will start to retire therefore reducing the amount of work force (and income tax) and increasing the number of pensions to be paid. The government is floating a bill to increase the retirement age to 68 to help solve this but as life expectancy is increasing it is unlikely to be enough (and not necessarily fair anyway.)

The most accurate statement in the BBC article reflected on the media itself

Quote:
“In short, our media and politicians on both sides have been talking a good deal of rubbish”
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Old 19 November 2008, 08:38   #16
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Not a bad summing up but inflation is far worse than they make out. It includes such major purchases as plasma tvs etc which have reduced in price by about 400% which is entirely down to advances in technology - and you don't exactly buy one every day. Put in the REAL inflation figures and it looks even worse.

Also remember Labour stealing Britain's gold reserves and selling it off at $200 an ounce!!!

Of course Labour's borrowing is out of control - it's what they have always done - we are almost at the point where people will stop lending us money and we will have to go cap in hand to the IMF like it did in 1976 - good old Labour........

The whole work - pensions - health thing is like a pyramid scheme - you need far more people at the bottom but people are getting older and there aren't enough at the bottom so like all pyramid schemes it will collapse. This is why Labour have allowed uncontrolled immigration - trying to prop up the pyramid - of course they were too stupid to see that all these foreigners would just send as much money as they could back home!!!
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