National Debt and why we must all pull together

debt bomb

UK National Debt, excluding bank bailouts, based on official data

During the second world war we all had to suffer deprivations so that we could maintain our freedom as a country. Basically we all pulled together. Bombs were no respecter of persons. We had the political will and leadership needed so that every one had to bear the burden and pay the price for our freedom.

Now we face an economic situation which potentially could be even more serious. But where is the political will to unite the country?

We have blamed the benefit “scroungers”, the immigrants, the bankers, the Conservatives, the Lib-Dems, the Labour party: everyone but ourselves. This is a call for unity. To stop being divisive and for everyone, rich, poor or somewhere in the middle, to accept their share of responsibility, and for us ALL to work together to get us out of the mess we are in.

United Kingdom National Debt

  • According to debtbombshell.com the United Kingdom national debt is estimated at £1,182,657,179,000 at 10:00 April 9th 2013. (Whoops left off 3 zeros from the figure first time)
  • That means that every man, woman and  child owes £18,552
  • That’s more than £40,880 for every person in employment
  • Every household will pay £1,917 this year, just to cover the interest
  • By 2016 our government forecasts it will reach £1,5 trillion

This is not just a technical debt owed by the government. We are effectively the guarantees of the debt. We all have to pay the interest through our taxes, and if the debt is to be reduced we all have to contribute.

Who are the lenders.

  • Insurance companies
  • Pension funds (that means you and me)
  • Overseas investors
  • Banks and financial institutions
  • Individuals

Imagine the chaos if we had to default on these debts.

Other Countries

How do we compare with other countries around the world. Because population obviously varies, this is expressed as Gross Government Debt as a percentage of GDP (Gross domestic product).

Country % of GDP
Greece 170%
United States 107%
United Kingdom 89%
Cyprus 87%
Brazil 64%
Zimbabwe 61%
Taiwan 42%
South Africa 41%
Sweden 37%
Romania 35%
South Korea 33%
Democratic Republic of Congo 32%
Indonesia 24%
China 22%
Peru 20%
Russia 11%
Iran 11%
Government debt as percentage of GDP globally....

Government debt as percentage of GDP globally. (2009 estimates) (Photo credit: Wikipedia)

War time

During the second world war we borrowed a vast amount to maintain our freedom as a country. Now, we have borrowed to maintain consumerism and this is simply unsustainable. During a period of war, everyone suffered deprivation, but we all pulled together and accepted deprivation without complaint. We suffered by our food being rationed, having to do without luxuries, being encouraged to grow our own vegetables, children being separated from their families, losing houses and lives though bombing and by many soldiers losing their lives.

We must all bear the burden

It has become fashionable to blame our ills on those living on benefits. We blame the bankers (not without some cause). It is time to stop being divisive. It is time for our leaders and media to be honest with us and stop spreading lies about “scroungers, and immigrants”. It is a time for national unity: to all work together, government, companies and individuals.

There is NO magic bullet but here are some of the steps we could take.

  • Stop handing out tax reductions to people earning £150,000 plus per year.
  • Stop international companies hiding profits made in the U.K. to avoid paying taxes.
  • Simplify the tax system to stop the crazy schemes that accountants and lawyers dream up to reduce the tax liability of the super rich.
  • Middle income people need to pay their fair share, but politicians need to be honest with them so they know why.
  • Even pensioners (like me) need to share the national burden.
  • Change our defense policy to one of defending the U.K., rather than one based on revenge (the so-called deterrent) and trying to act as policemen in a world which  doesn’t want us.
  • Stop the ridiculous situation of having to pay subsidies to SEVEN MILLION low earners by increasing the minimum wage to a level where those in work can support their families.
  • Stop blaming all on benefits for the situation, but concentrate of reducing the tiny amount lost on benefit fraud.
  • Invest in projects which will earn money in the future (such as toll motorways, high-speed trains the Severn Barrage etc) rather than increasing debt to maintain unsustainable lifestyles.

What do you think? I don’t suppose many will agree with everything I have written. Please leave your comments below. I will only delete abusive comments.

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Comments

  1. It’s really refreshing to read something that suggests an actual workable solution to the problem. I hope your idea captures our imagination as a nation and is put into practice. Time for us to pray!

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  2. Thanks for the facts and figures, George.

    It’s a serious problem, and one that the government will most likely try to skirt around by continuing to print new money (since they haven’t the appetite for any genuine reform). Likewise I hear that inflation was used to wipe out 90% of the debt built up after WWII.

    Unfortunately international law and EU law generally make it very difficult to extract more cash from the very wealthy and corporations. Instead we have all countries lowering corporation tax, in order to try to encourage corporations to at least pay some tax within the country, rather than relocating it to Switzerland or Luxembourg (which I don’t think we can easily prevent by other means).

    I agree with that if we’re slashing corporation tax, then we should at least raise the minimum wage somewhat to compensate. While the minimum wage is so low, we end up with taxpayers supplementing the wages of the lowest paid, which is effectively another subsidy for corporations (in my opinion).

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  3. Hard to disagree with anything you suggest here. Trouble is, the privileged well off don’t much like it when their ability to become even richer is shackled or slowed down.

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  4. Thank you George. We need to stop the blame game whether bankers, politicians or scroungers and watch what we speak while blessing our nation with our words and loving our neighbour, praying for those in authority and giving generously.

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