The UK Economy in Serious Debt Trouble

Britain’s debt levels are dangerously high and are damaging the economy, according to one of the world’s leading financial watchdogs.

It means the country is in the danger zone following a ten-year borrowing binge under the last Labour government, a hard-hitting report from the Bank for International Settlements has revealed

The Bank for International Settlements (BIS) said government, corporate and household debt in Britain jumped from 223 per cent of gross domestic product in 2000, or £2.18trillion, to 322 per cent, or £4.68trillion, in 2010. That is the equivalent of £180,000 per household

In 2010, Britain had government debt of nearly 90 per cent of GDP, corporate debt of 126 per cent and household debt of 106 per cent.

UK PM David Cameron should seriously re think his commitment to phasing out the production of energy based on burning of fossil fuels as it is going to cost the UK economy at least £300 billion over the next 10 years to go renewable energy (which we all know works intermittently).

What is it with Labor and debt? They’re like junkies to a needle.

While our government debt of 15.4% of GDP is low compared to the UK, the trend is more concerning.

Andy Semple

Follow him on twitter @Bulmkt

Comments

[Anton]

1.

Great inheritence for their kids!

[Gary]

2.

The problem is our modern universities teach Keynes like it was supported by evidence, instead Keynes should be ridiculedcand discredited and his general theory burned.

The amount of left leaning university grads I meet espousing defect spending as a cure for alleged market failure is disturbing. Ludwig Von Mises is always my response to them, they shrug and say, "whose that"?

[bluebell]

3.

The global economy is built on endless growth....the giant Ponzi scheme we have created for ourselves is set to crash all around us. Governments saving Banks.....now it's those very same governments that need saving....up to their eyeballs in debt. Talk about re-arranging the deck chairs on the Titanic!!

[Anton]

4.

endless growth is actually possible, provided it is based on actual productivity gains - technological development and innovation.

Western governments have created the illusion of growth through increasing the velocity of circulation of money and increasing debt. This was appealing because the artificial wealth could be directed to low knowledge sectors to buy votes.

Manufacturing is the best place to create value. Second choice would be primary industries - farming and mining. Services are effective in distributing wealth, but create little actual wealth on their own. What have western governments done?

[Andy]

5.

Spot on - Manufacturing is the best place to create value. Second choice would be primary industries - farming and mining.

Services just moves money from on sector to another.

[Pip]

6.

You might be interested in the current guests on the ABC Counterpoint program:

29 August 2011
American Liberalism: if it's broke, then fix it!
With the US economy stalling, some Americans committed to Liberalism are re-thinking the fundamentals. Ted Nordhaus from the Breakthrough Institute thinks Americans have forgotten what drove their post-war economy.

Ted Nordhaus: Well if you look at the US economy, our problem is not that we don't consume enough, it's that we don't produce enough. We've increasingly become a financialised economy, we've outsourced much of our manufacturing. We are increasingly a service economy, and you know there's lots of important things about a service economy but at the end of day in a globalised economy if you don't make anything any more you're in the long term going to have problems. So in spite of that fact what both parties have sort of offered in their economic agendas has been duelling proposals to stimulate consumption. You know, Democrats want to do it through stimulus and Republicans want to do it through tax cuts. But neither of these things actually speak to what we know actually over the long term drives economic growth, which is technology, technical change, and productivity. So unless you have a strategy for driving long term productivity growth and accelerating technological change, you don't really have a strategy for long term economic growth.

http://www.abc.net.au/rn/counterpoint/stories/2011/3302265.htm

Next week they are showcasing Daniel Bell the Influential American sociologist best known as the author of The End of Ideology.