British debts and deficits - worse than Greece

[Skybird]

With some surprise I read this week that Great Britain is in an economica and finacial situation that mybe is worse and more threatening than that of currently much discussed Greece. I did not know much, if anything, abiut British economy, and followed the dramatic news about Greece, I know a bit about the basic figures of Japan and America, and I wonder why currently everyone in the Euro-Zone speaks about Greece, while Italy's situation maybe is much more threatening, with Spain and Portugal close on it'S heels, and Iceland, also in a dramatic conditions, wants to contribute to Euroland's misery by now joining the currency.

Our Western nations - are bubble-countries. And the bubbles, one by one, set to burst.

Add this to the growing economic pressure from Asia, collapsing social systems due to misled migration policies, the complex issue of oil, and you should start to feel worried if there still is some sanity and life left in that body of yours. The design of our countries, their financial, social, economic structure, seem to be unfit to survive the storm ahead.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7269629/Britains-deficit-third-worst-in-the-world-table.html


Britain has one of the worst deficits as a percentage of GDP in the world, according to OECD figures. Only Iceland and Greece have higher deficits and experts fear it could overtake Greece. Here is a table of how the UK compares with other nations.


Deficit as a % of GDP

Iceland 15.7
Greece 12.7
Britain 12.6
Ireland 12.2
United States 11.2
Spain 9.6
France 8.2
Japan 7.4
Portugal 6.7
Canada 4.8
Australia 4
Germany 3.2


* Figures from OCED forecast in November 2009.

Of Britain's deficit, Ross Walker, chief economist at RBS, said: "What do you expect when you run a deficit even during the boom years."

German paper Die Welt writes that this year analysts expect the kingdom to reach debts equal to 80% of the GDP. that just covers the public sector - if credits and economy are included, Britain'S debt level will be at 460% of the GDP this year. that is the second place behind world record holder Japan with 485% of their GDP. Rating agencies like ING, S&P and BCA now threaten to lower the credit rating of England. But if it loses it's triple-A rating, this will further effect the pound Sterling, which already is under pressure from what analysts of rating agencies see as signs of a stagflation- not as a slow economic recovery. they say the Pound could loose up to 30% of it's current value. which brings a rat-tail of other problems.

It seems to me we are sitting in a ship, and more and more small little holes open in the hull everywhere, and become bigger, and nobody knows how to stop that process. And the command has been given to send the band on deck and let it play.

Get your towels ready. We're going down - and it will be a wet trip.

Meanwhile speculants as well as some governments try to trick the German government into bailing out the Greeks - ignoring the background that this would violate the rules of the stability pact (that'S why some constitution experts already recommended parties and politicians to sue the government at the Constitutional High Court if they try to directly or indirectly give German taxes to Greece) that forbids any such aid as a safety to enforce a minimum stability of the Euro currency. Any such paments are not only illegal by EU treaties (although I admit the EU has a solid record now to break it's own rules if it is opportune), but is money that is payed by Germany increasing it's own debts. Additionally, they alrerady have big strikes in Greece against planned cuts in spendings, and the latest report of Transparency International says that in mean values every Greek last year has payed 1374 euros in briberies to speed up the bureaucratic procedures of the state'S bureaus and services. For doctors, lawyers and and banks, the mean per head "fakelaki" even was higher, with 1671 Euro. Almost 14% of Greeks being asked said that they had been demanded to pay briberies. How many even offer it voluntarily to get what they want or to get it faster, is not known - probbaly more than 14%. 787 million euros in "fakelaki" have been payed in 2008, that is a rise of 23% over the past 2 years.

http://www.transparency.de/Tabellarisches-Ranking.1526.0.html

I fear that the financially stronger, a - little - bit healthier nations in Euroland will allow to get pulled won by countries like Greece, Spain, Portugal, Italy in a suicidal attempt to continue selling the euro as a success story. I more and mroe see it as a nother nail in europe's coffin, but maybe I will be thankful for it: if the collpase of the Euro eventually becomes the startinging gun for the collapse of the EU itself.

In any case, we will get wet, this way or the other.

[Tribesman]

I did not know much, if anything, abiut British economy
Is this the same person who said the policies which led to the creation of the property bubble, the de-regulation and the asset stripping were the great steps which had put Britain on the right road and had cured it of its sick man of europe image?:rotfl2:

The design of our countries, their financial, social, economic structure, seem to be unfit to survive the storm ahead.

Does this belong in the "sky is falling" topic?

I fear that the financially stronger, a - little - bit healthier nations in Euroland will allow to get pulled won by countries like Greece, Spain, Portugal, Italy in a suicidal attempt to continue selling the euro as a success story.
Never fear , the muslim horde will have swamped the world before then.

[bookworm_020]

I think the latest figures show that Australia's debt as % of GDP is around 3.5%.

Australia's GDP is rising, so are our intrest rates.

http://www.smh.com.au/business/economic-growth-picks-up-steam-20100303-phhk.html

Now if only our idiots in power could make some useful long term decisions that would benifit the country.

[Schroeder]

Now if only our idiots in power could make some useful long term decisions that would benifit the country.

And that is exactly the problem. Those long term decision should have been taken 20 to 30 years ago. Now it is pretty much too late. We are getting strangulated by our interest payments and now any decision made to get us out of this mess is one with major impact on daily live of everyone. That is not going to happen in a democracy because every party/politician is reluctant of doing things that will cost them the next election.... and it would cost them the election because people are stupid and do only think in short terms and start to protest if they have to give a bigger share.
But the bottle is empty. I can only give water to someone if I have a full bottle! It is high time to cut unnecessary costs (whatever this would be) and try to consolidate this mess but we rather stick our head in the sand for the next decade or to and blame everything then on the previous governments.

[Tribesman]

Those long term decision should have been taken 20 to 30 years ago.
You are still paying for the huge costs Germany gained with re-unification.

I think the latest figures show that Australia's debt as % of GDP is around 3.5%.

Though in this topic Australia mainly avoided the financial meltdown that hit many countries, plus it didn't have the property bubble like those countries.
Though of course Australia is very reliant on the flow of more immigrants to its shores.
Actually that reminds me, who was that woman who was always ranting about immigrants and the Muslim horde taking over Australia?
The imminant threat the country faced led he to decide to not only to leave Australian politics but to leave Australia itself...she chose to move to Britain .....obviously she hasn't read any of skybirds posts about the Muslim horde:rotfl2:

[Skybird]

And that is exactly the problem. Those long term decision should have been taken 20 to 30 years ago. Now it is pretty much too late. We are getting strangulated by our interest payments and now any decision made to get us out of this mess is one with major impact on daily live of everyone. That is not going to happen in a democracy because every party/politician is reluctant of doing things that will cost them the next election.... and it would cost them the election because people are stupid and do only think in short terms and start to protest if they have to give a bigger share.
But the bottle is empty. I can only give water to someone if I have a full bottle! It is high time to cut unnecessary costs (whatever this would be) and try to consolidate this mess but we rather stick our head in the sand for the next decade or to and blame everything then on the previous governments.


Historians and some economists often say that 13% deficits are the deciding criterion beyond which states can no longer maintain themselves in the medium and long run, and start falling apart (empires), or go bancrupt and break down (nations). That is because interest rates eat them up alive in a process that is feared to be irreversible from that mark on.

I assume there is such a critcal, more individual mark for debts, too. After WWII, Britain had 485% of it'S GDP in debts they write. Now it is 460% again.

And when nations in peacetime let things slide so that they accumulate debts in public and private sector together that are several times as high as the whole yearly GDP, then that is hefty, too. It means that nothing they claim to own they really own at all. It's a bubble. It is living on giant tick.

Both are signs for totally incompetent and irresponsible management. Clever economists knowing oh so much about theories and complex finance models may laugh at me, but I stick to this simpe formula, because it is simple, sane reason dicdating it:

when the appel costs one Taler, and you have three Taler, you can buy three, two or one or none apples. You can'T buy four or five.

If you need to pay back old debts, you can buy a maximum of two apples only, two Talers. The third Taler of yours is needed to pay the debts.

If you need to put aside reserves for the future (and you always must!), you can buy a maximum of only one apple: one Taler. The second Taler is for the debts, and the third is for the reserves.

I wonder what is so difficult in understanding this.

Our finance system is complex, but complexity does not make it any less insane.

There is no social excuse whatever to live beyond your means, even less there is any "social" excuse to spend more money than your nation can produce by it's own economic vitality. If I personally would run my financial budget the way states do it, I would have committed suicide many years ago, leavong behind a truckload of debts. I invite politicians, bankers and economy managers to correctly understand that as an invitation. :x

Finances, and others' debts, beside demographic pressure are a formidable weapon of soft warfare, the Chinese illustrate their mastery of this art. So do powerful Arab countries. Saudi Arabia recently has demanded Europe and America to be compensated for the finacial losses once it has run out of oil. Considering the constantly growing influence in the West and the volume to which they buy shares of Western key industries and first line companies, this is not just empty words. They mean it serious.

[Schroeder]

You are still paying for the huge costs Germany gained with re-unification.

Yes, I know it was more meant for the west as a whole (though here the tough decision need to be done too, we can't allow the reunion to become our funeral....)


Though in this topic Australia mainly avoided the financial meltdown that hit many countries, plus it didn't have the property bubble like those countries.
Though of course Australia is very reliant on the flow of more immigrants to its shores.
The difference is that Australia doesn't let everybody in.
If I'm informed correctly one must have either some money or a job in Australia to be allowed to stay there. They don't take the uneducated underachievers from other countries. I wonder why we can't introduce the same here. :shifty:

[Skybird]

I wonder why we can't introduce the same here. :shifty:
Because the Aussies are the bad guys and we Eurobians are the good guys, from a politically correct point of view. ;) Or do you object to our policy of meaning things well? :stare: Bad boy you are, then - and so antisocial! :nope: You should really meet a therapist and learn to talk about your inherent supremacist psychosis. Those underachievers are humans of equal value, too, you know.

[Dan D]

Hey Schroeder,

in Germany you get a residence permit as a self-employed person if you invest at least 500.000 € and create 5 jobs.

Else, you must either be a highly trained person like scientist, professor, manager or skilled worker with special work experience and proven high income (good tax payers).

Finally, there is working visas for temporary stays, which you get only, if you prove that you have a valid contract of labour before you enter the country.

If you can’t make a living on your own, you get tossed out of the country (no tax payments, no umemployment insurance contributions).
That’s it, roughly.

Germany like every other nation can not afford unregulated immigration into its welfare system, so immigration laws are pretty tough actually.

Makes me wonder, why you seem to know the circumstances in Australia better than those in Germany but I guess you are feeling unhappy about the current political situation in Germany and you are looking for a change :-)

[Tribesman]

The difference is that Australia doesn't let everybody in.

Can you name any country in Europe that doesn't have regulations on immigration and work permits?

Because the Aussies are the bad guys and we Eurobians are the good guys, from a politically correct point of view.
:har::har::har::har::har:
which is why Pauline Hanson is moving to europe to get away from the swarms of muslims who are taking over the continent.

[AVGWarhawk]

It's Bush's fault. :stare::O:

[Schroeder]

If you can’t make a living on your own, you get tossed out of the country (no tax payments, no umemployment insurance contributions).
That’s it, roughly.


I actually wonder then where all those people come from who hardly speak German and are living of well fare here.... Obviously it wasn't that tough to become German.


Makes me wonder, why you seem to know the circumstances in Australia better than those in Germany but I guess you are feeling unhappy about the current political situation in Germany and you are looking for a change :-)I only seldom immigrate into my own country while I considered Australia to be a place to live once (though also just for a short time during my late teen years).;)

[bookworm_020]

Though in this topic Australia mainly avoided the financial meltdown that hit many countries, plus it didn't have the property bubble like those countries.


We did have a large property bubble, but it deflated a couple of years before the GFC. Prices are starting to rise again as there is a general shortage of housing (rentals are almost non existant!)

The difference is that Australia doesn't let everybody in.

Sometimes it doesn't seem like it! I give thanks again and again that Australia doesn't have a land border!:yep:

[Dan D]

I actually wonder then where all those people come from who hardly speak German and are living of well fare here.... Obviously it wasn't that tough to become German...

I can think of

a) foreigners who are married to a German, “sham marriages” (fictitious) included
b) “guest-workers”, people Germany invited to work in Germany in the past for reasons of shortage of manpower, and their offspring. What, they don’t leave the country again? This comes unexpected.
c) illegal aliens.


Illegal aliens:

Remember the Yugoslav wars when you could see Serbs, Croatians, Kosovo Albanians, Bosnians, and Montenegrenians burning their Yugoslavian passports live on TV?

As a result of the war we have something like 387.000 de-facto-refugees in Germany.
Their permission to stay is limited to an “exceptional leave to remain” (Duldung).

In the past, we did not send them back to the war zone for humanitarian reasons. Their deportations were stayed for a period of time.

Today, each and every alien file gets reviewed. Some of these refugees have gained a right of residence because they are long-timers who have managed to integrate themselves into German society: they earn a living on their own, speak some German, their kids are enrooted in Germany (“rootedness”), but most important: they no longer depend on welfare aid.

Those, who we refuse a right of residence, we are trying to deport.

Here comes the problem: Because they burned their Yugoslavian passports to celebrate their cause, people no longer have valid proof of their identity. Many times it turns out that it is impossible to get a new papers, because the native country officials claim, that they have never heard of that person. That way the de-facto refugee becomes a stateless person.
We can’t get rid of him because no other country wants him and so we have to keep him.

Now, it is time to kill the cat:

Guantanamo.

IMO it could turn out that the USofA made a big mistake with their illegal practise of hijacking “terrorists” from other nations to detain them in Guantanamo. Those who are political responsible for it probably did not think enough or did not care about the possible consequences.
You have to hijack the person and his passport.

President Obama had promised to close Guantanamo.
But how do you get rid of the suspected terrorists? Their home countries not really want to have them back and will pretend they don’t know them, especially because they are labelled as “trouble-makers” which was the reason to detain them, was not it?

It will be interesting to see how the US is going to solve this home-made problem of importing suspected terrorists.

My guess is, that others countries will take some of those prisoners whom they are convinced were detained by mistake, as a humanitarian act. For the rest, the US will probably have to pay money to other countries the get rid of them (bribe them).


What does it all have to do with Greece?
Nothing, but they are short of money, so why not ask them to take over prisoners?

So, to answer your question, Schroeder, I think it is safe to say that those people were not hijacked by aliens and secretly brought into Germany.

[Snestorm]

I actually wonder then where all those people come from who hardly speak German and are living of well fare here.... Obviously it wasn't that tough to become German.

They can't become german any more than you can become chinese.
They just become citizens of Germany. Big diffrence.

And no, I'm not PC.

[OneToughHerring]

Hey Schroeder,

in Germany you get a residence permit as a self-employed person if you invest at least 500.000 € and create 5 jobs.

Else, you must either be a highly trained person like scientist, professor, manager or skilled worker with special work experience and proven high income (good tax payers).

Finally, there is working visas for temporary stays, which you get only, if you prove that you have a valid contract of labour before you enter the country.

If you can’t make a living on your own, you get tossed out of the country (no tax payments, no umemployment insurance contributions).
That’s it, roughly.

A lot of people these days have a work contracts for maybe only few months. Would that be enough? And then kick out of the country? What if the country they are being returned to has the same policy, meaning they don't take anyone without work there, and there is basically zero work around. Will the person be bounced around forever in a kind of limbo between nations?

Edit. On subject itself, Germany (or some German politicians) have told Greece to sell some of it's islands. Greece I think said no. I wonder what would happen if Greece just said "This Is SPARTAA!" :D

[Immacolata]

If you need to put aside reserves for the future (and you always must!), you can buy a maximum of only one apple: one Taler. The second Taler is for the debts, and the third is for the reserves.

I wonder what is so difficult in understanding this.

Our finance system is complex, but complexity does not make it any less insane.


I like that analogy. Debt is a very good thing in small measures, because it is the lubricant that makes things go smoother. The oil that greases the society and economy. You can iron out and get things running instead of stopping everytime you run out of cash.

But.
Drown your engine with oil and you risk catastrophical damage to it. While debt and oil are not easily comparable, you should know when to apply it and when to stop. In my personal economy, a bit less than one third of my salary is going towards debt repayment. And that is how it should be.

I find it shocking that UK has accumulated that much debt!