Government borrowing for last year = £107,700,000,000

[yorkie_chris]

Originally Posted by ClunkintheUK

20% up to about £35k, then its 40%. and 50% over £150k, but not many people are going to be earning that working on HS2.

Plenty managers, consultants and estate agents...

They should probably try and repair some of our roads first. Hire a bunch of extra workers, resurface a shed load of (all) affected road surfaces and then employ them to help out with HS2 somehow. I'm sure they'll need service roads etc.

[dizzyblonde]

There's not much talk about this legislation

I wonder why?
http://m.huffpost.com/uk/entry/5145194/

Perhaps they should raid the bank account of Mr Google, or Mr G4S, or Mr Cafe Nero for tax dodges? Hmmmmm that would mean a lot of government friends might get bitten too....

No wonder it's quiet. And possibly illegal.

Don't forget amazon and Starbucks.

[dizzyblonde]

Originally Posted by Matt-EUC

Don't forget amazon and Starbucks.

Joking aside, raiding a people's bank account in 'affluent' countries is a suggestion made by the IMF not too long ago.
They forced one country to do it for a bail in, once it's been done, it can be done again in many different guises.

[NTECUK]

Well I'm sure that the money can be moved to countries who won't subscribe to such underhand policies

[keith_d]

Originally Posted by Spank86

Yes and no.

Much of that can be inflated away over time.

It much better to spend future money than present money because it'll be worth less when we get there.

I know it's a bit late to respond to a post on page 1, but I think you've forgotten that the government pays interest on it's debt. I've not found any current figures, but this time last year the government's debt service costs were just over 3%, or broadly similar to inflation. So the real terms the value of government debt remained roughly constant.


I also got curious about what they're spending it all on, so here are the big ticket items from 2013-14:


Pensions: 21%
NHS: 18%
Welfare: 17%
Education: 13%
Debt service costs: 7%
Defence: 6%


Yep - we're spending more on our debt than on our armed forces.

But the interesting bit is the cost of health and pensions. Together they're almost 40% of the budget and they're going to rise over the next few decades. Death Race 2000, may have been a few years premature

Originally Posted by keith_d

I know it's a bit late to respond to a post on page 1, but I think you've forgotten that the government pays interest on it's debt. I've not found any current figures, but this time last year the government's debt service costs were just over 3%, or broadly similar to inflation. So the real terms the value of government debt remained roughly constant.

You cant extrapolate long term trends from whats currently a pretty unusual situation, the interest on new debt is fairly high right now and inflation is very low. It's also worth noting that we have an awful lot of very old debt because interest rates on it are low so the current rate isn't the whole picture. traditionally inflation far outstrips government interest rates

Originally Posted by keith_d

But the interesting bit is the cost of health and pensions. Together they're almost 40% of the budget and they're going to rise over the next few decades. Death Race 2000, may have been a few years premature

And how much of those are staff salaries which essentially represent tomorrows taxes?

[keith_d]

Originally Posted by Spank86

You cant extrapolate long term trends from whats currently a pretty unusual situation, the interest on new debt is fairly high right now and inflation is very low. It's also worth noting that we have an awful lot of very old debt because interest rates on it are low so the current rate isn't the whole picture. traditionally inflation far outstrips government interest rates

I used the average debt service cost and an average inflation value, both of which are combinations of a whole assortment of variables. It's not a great measure, but it's an accessible one.

In general the coupon on new gilt issues lags inflation, so during periods of high inflation the government benefits from their low perceived risk by deflating away the value of some debts. However, over the last 20 years inflation has remained low, and for much of that time the coupon on gilts has been higher than inflation. Even QE pumping money into the banking system has generated surprisingly little inflationary growth. So there has been few opportunities for deflating away deficits.

From a historic perspective, even 20 years of low inflation might be regarded as an unusual occurrence. But from a personal perspective, twenty years seems like a pretty long glitch.

Originally Posted by Spank86

And how much of those are staff salaries which essentially represent tomorrows taxes?

Now that's an interesting question, because pensions and health care are very different types of expenditure. Health care does pay salaries, and produces some benefit to society by keeping people healthy and therefore more productive. While pensioners are frequently below the tax threshold and generate little economic activity.

Originally Posted by keith_d

From a historic perspective, even 20 years of low inflation might be regarded as an unusual occurrence. But from a personal perspective, twenty years seems like a pretty long glitch.

Governments aren't people, or at least a government isn't a person.

Originally Posted by keith_d

Now that's an interesting question, because pensions and health care are very different types of expenditure. Health care does pay salaries, and produces some benefit to society by keeping people healthy and therefore more productive. While pensioners are frequently below the tax threshold and generate little economic activity.

But none of the money stays with pensioners (not in the end).

Indirect benefits is one thing but the other is that the money that flows out flows back and if it doesn't flow out then it can't flow back. If all there were was pensioners who paid 100% tax then the government could pay them an infinite amount indefinitely. The tax rate isn't anything like 100% obviously but all this means in real terms is that each £ makes more hops before it returns to government coffers.



I find it exceedingly odd that people are so concerned with our budget deficit but so completely unaware of our trade deficit which would seem rather more important.