British debts and deficits - worse than Greece

[Skybird]

Originally Posted by Schroeder

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.

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.